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Intel: new tablets a big step toward reaching aggressive target

By Noel Randewich

SAN FRANCISCO (Reuters) - New Intel-based tablets from major brands will start hitting store shelves in June, and senior executives at the chipmaker hope the offerings will move it closer to an aggressive sales goal.

Far behind rival Qualcomm in mobile devices, the upcoming tablets are the result of Intel Corp's strategy to sell chips this year at a loss in a bid to stake out badly needed market share. Intel is betting that in the future, its customers will keep using Intel chips without the discounts.

Toshiba <6502.T> this week announced six tablets and PCs with detachable screens made with Intel chips, one of which runs the Android operating system and the rest Windows. More Intel-based tablets will start hitting U.S. store shelves in June and July for back-to-school shoppers, Erik Reid, general manager of Intel's Mobile Client Platforms unit, told Reuters in a recent interview.

"It will be a new high-water mark, to be eclipsed by another high-water mark at the holidays," said Reid, who is managing Intel's tablet push.

With the PC industry shrinking, mobile devices and other new markets have become a top priority for Intel. Most tablets are made with chips from Samsung <005930.KS>, Qualcomm and other companies that use low-power technology from ARM Holdings .

Earlier in May, CEO Brian Krzanich told Reuters that Intel was well on its way to reaching his goal for the company to increase its sales of tablet chips this year to 40 million units.

After shipping 5 million tablet chips in the first quarter, Intel is on track to meet a target of 7.5 million such chips for the June quarter, Krzanich said.

"We're on schedule to hit that number and we'll see if we can do better than that," he said.

Global tablet shipments from all manufacturers in 2014 will grow 12 percent to 245 million, less than a previous forecast of 261 million devices, because people are keeping their devices longer, market research firm IDC said on Thursday. Intel sold around 10 million tablet chips last year.

Manufacturers have launched a handful of Windows tablets running on Intel's newest Bay Trail chips, but those chips have been slow to appear in devices running the popular Android platform.

On Tuesday, Intel announced a deal with Chinese chipmaker Rockchip to make components for entry-level Android devices aimed at local consumers in China.

Partly reflecting the financial incentives Intel is offering manufacturers to use its tablet chips, the company's mobile and communications group had an operating loss of $929 million in the April quarter on revenue of only $156 million.

As well as big PC brands increasingly making tablets, Intel expects small manufacturers making devices for China's domestic market to play a major part in reaching its 40 million chip goal this year, Reid said.

"We're confident, but this is by no means saying it's in the bank."

(Reporting by Noel Randewich; Editing by Jonathan Oatis)

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