Intel Corp (INTC)

[Saturn V]

Bay Trail ....where obviously an integrated modem was missing,

The lack of an integrated modem had nothing to do with contra revenue. No one else has an integrated modem. As I said earlier BayTrail was optimized for higher end Windows tablets and not for lower end Android devices. I believe that the first generation Baytrail chips only worked with higher end, and expensive memory chips and not with cheaper memory devices, and so Intel offered a subsidy to offset the cost of more expensive memory devices.

The generic problem is that Intel optimizes the CPU and GPU designs extensively which increases the design time. So its products may not meet be optimized for the latest trend in system design. The Baytrail was probably a victim of the Microsoft Windows 8 disaster. Intel has a vey large number of CPU/GPU configurations to meet a wide range of customer requirements. But it may not be able to anticipate the latest trend in peripherals and system configurations. The on chip FPGA gives much greater flexibility.

Intel could have bought the Altera FPGA IP without an acquisition. But an acquisition gives greater control, and makes sure that FPGA designs are better tuned to Intel;s changing needs.