Intel, hell-bent on hitting 40 million tablets, ups subsidies

Intel fully intends to see 40 million tablets ship this year with its chips inside. And it will make payouts to customers to get there.

Intel powers the Android-based Asus MeMO Pad. But Intel needs to sell more tablets. Lots more. Asus

Intel is hell-bent on getting 40 million Intel-based tablets out the door by the end of this year. That means more customer subsidies.

During Intel's first-quarter earnings conference call Tuesday, there was plenty of discussion about "contra revenue," a cryptic reference to subsidizing customers to use Intel chips for tablets.

Subsidies: "[CEO] Brian [Krzanich] is laser focused on [reaching] 40 million tablets," Chief Financial Officer Stacy Smith said during the call.

One way to make sure Intel hits that number by the end of the year is to increase contra revenue, Smith said.

"As we ramp tablets...[we] see the associated contra revenue dollars for tablets. We saw some of that in Q1 and we'll see a bit more in Q2," Smith said.

So far this year Intel has shipped 5 million units. Most of the tablet shipments thus far have been Android, Smith said.

Krzanich broke that down even more, saying 80 percent to 90 percent are Android tablets and the rest Windows.

"The majority is in $125 to $250 range," he added.

Broadwell: Krzanich also mentioned that Intel's next-generation mainstream processor "Broadwell" will be certified for customers by the end of this quarter, and device makers are expected to bring out Broadwell-based products in the second half of the year.

Broadwell is expected to be more power efficient with higher-performance graphics, among other improvements.

SoFIA: a quad-core version of Intel's SoFIA chip will come out in 2015. SoFIA is targeted at value smartphones and tablets.