By Malik Saadi

After several attempts to get into the mobile market, Intel has finally revealed the first commercial phone powered by its Atom chipset. The phone is co-designed, co-branded by Intel and the French operator Orange, and is manufactured by the Taiwanese PC maker Gigabyte Technology. Although the phone comes with a high-profile hardware including 1.6GHz CPU, high resolution 4” display, 16GB of storage, HD voice, HDMI, NFC, it will not be targeted at the premium end of the market. This may lead one to think that the margin Intel will make from this phone will be extremely small, if it even makes any profit from it.

By doing this, it is clear that Intel wants to send a message to the industry that its Atom chips can power high-performance, low-power consumption, thin-architecture phones all at very competitive price compared to alternatives CPUs based on ARM architecture.

However, several questions come to mind when assessing market opportunities for the phone: Why the phone was not developed in collaboration with an established OEM? Why the phone is not targeted at the premium end of the market even though its BOM is too high? Why the phone is branded “intel inside” and what does this mean to consumers? What marketing resources the company is putting in place in order to promote this brand? Why the phone is not powered by the most recent version of Android OS? What are the incentives for developers to port their existing applications compiled for ARM to Intel’s x86 platform?

All in all, it is surprising for an innovative giant like Intel to position its first mobile device as a main-stream one with almost no differentiation from competing phones. This move is likely to dilute its brand as one of the key innovators in the industry.