Why Did Intel Corporation (NASDAQ:INTC) Delay The Launch Of Its Broxton Processor?

Since April 2014, Intel Corporation (NASDAQ:INTC) has been telling its investors that it would be introducing its Broxton chip system in the year 2015; the month of June to be more precise. The company scheduled the release of this system so as to optimize its material costs and maximize its revenues.

However, by the last month of 2014, it became crystal clear that the company has no plans of introducing Broxton in 2015. Intel Corporation (NASDAQ:INTC) confirmed these anticipation in its recent investor meetings where the company announced that the release of Broxton has been shifted to 2016. A number of market analysts and experts are wondering as to why the company postponed this project.

The chief financial officer of Intel Corporation (NASDAQ:INTC), on its April 2014’s earnings call, announced that the company has a number of products to launch into the market. The CFO specifically mentioned SoFIA and how it has been developed for the lower end particularly. He also mentioned that Broxton will be introduced by mid 2015, which will come under the mid to high range products portfolio.

It is important to note here that the CFO of the company did not mention as to whether the Broxton processor will be a mid range product or a high range product. Broxton is an application processor, which does not have cellular baseband.

Intel Corporation (NASDAQ:INTC) presented a road map in its recent investors’ meeting. What is important to note here is that the company does not categorize Broxton under ‘Performance and Mainstream’ like it did in its 2013 road map, rather the category has been changed to ‘Performance.’ Moreover, what is interesting is the fact that the company has introduced a new chip on its map. The chip says SoFIA MID, which means that the chip has been developed for the mid range of cellular market. This chip has an integrated LTE with an Atom processor (quad core).

The company announced in 2014 that it will have Broxton targeted at mid to high end products whereas SoFIA LTE 2 will be targeted at the ‘value’ sector. This means that there are 3 mobile chip products now: Broxton for the high range, SoFIA MID for mid and SoFIA LTE 2 for low.

Experts are of the view that the company needed to integrate more in its chip if it wanted to target Broxton for the high range products. And more integration means more time. Furthermore, since the market for mid range products is more mature and offers more merchant chip trading, chances are that Intel Corporation (NASDAQ:INTC) pulled off its manpower and other resources from Broxton and shifted those resources to SoFIA MID.

Coming to the stocks of Intel Corporation (NASDAQ:INTC), the company, on the last trading day of December 16, 2014, started its stocks at a price of $35.86 and closed at a price of $35.56, after hitting the highest price of $36.50. As far as the market capitalization goes, the figures currently stand at 172.03.