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Intel Pays Hardware Makers to Use its Tablet Chips

Intel's original market, CPU's and Desktop computers is showing a decline in favor of smartphones and tablets.

Intel’s original market, CPU’s and Desktop computers is showing a decline in favor of smartphones and tablets.

What do you do if you are the leader in a market that is showing signs of decline? You try to find a way to get into an area of your market that is growing ? by hook or by crook ? right? This is exactly what Intel is doing. It is paying hardware manufacturers an incentive to include its tablet chips in the fastest growing segment of the mobile computing industry: the tablet.

Originally slated for the high-end segment of the tablet market, Intel’s bay trail tablet chips is now being pushed by Intel among its hardware partners for inclusion in lower to high-end tablet models.

To sweeten the deal, Intel is paying these hardware manufacturers a cash incentive. This is not illegal, if you are wondering. Intel has been above board and transparent with these kinds of payments. However, it does show that Intel is very serious about becoming a relevant player in the fast growing tablet market. It has to be, considering the fact that tablet computing segment is the only real computer segment that is showing any signs of growth. Notebook computers? Declining. Desktop computers? Declining. Even ultra books which are supposed to be the next big thing doesn’t hold a candle to the growth of tablets. Tablets are here to stay and they sure are evolving fast. Intel doesn’t want to miss the boat on the rise of the tablets. This is why you’re seeing Intel payments to its hardware manufacturer partners to include Intel tablet chips.

Expect more such contra revenue payments in the near future as Intel seeks to ramp up its presence in the tablet market. According to Intel, its contra revenue program is bearing fruit. It expects a 400% growth in its tablet chip business for 2014. Overall, this is good news because subsidized hardware means lower prices. Moreover, increased competition among CPU makers in the tablet market can mean even cheaper tablets in the future.