Intel predicts rebounds for PC, datacenter units later this year

Intel predicts rebounds for PC, datacenter units later this year

Summary: While the PC market looks like it's on a downward spiral, Intel executives are still predicting a comeback.

SHARE:
intelceo

With the PC market looking like it is in shambles, Intel is still predicting rebounds for both its PC and datacenter units -- at least by the end of 2013. For PCs, executives stressed lower prices matched with touch as key growth drivers this year.

See also: Intel's Q1: PCs, mobile, data center wild cards abound | Intel's Q1 good enough, company remains upbeat | Outgoing Intel CEO Otellini: Materials, manufacturing our foundation

During the earnings call on Tuesday, Intel chief financial officer Stacy Smith responded to analyst skepticism as why investors shouldn't expect a repeat of last year's second half.

Here's Smith's answer:

I think that as the OEMs start looking at new form factors that they can design around our new chips (Haswell in particular and maybe Baytrail) and Windows 8 enabling touch, the explosion and form factors and competitiveness of that platform is going to be substantially different at price points down into the [$300] or $400 range enabling touch. We didn't have that last year. So you go into the prime selling season with new products, new technologies, new form factors, and new capabilities that up to now [had] unapproachable price points.

Smith also outlined the chip maker’s forecasts for "double-digit" revenue growth for the datacenter group followed by growth for the PC group in the "low single digits."

To recall, first quarter revenue for Intel's PC Client Group was $8.0 billion, down 6.6 percent quarterly and down 6.0 percent annually (statement). The Data Center Group saw Q1 revenue of $2.6 billion, down 6.9 percent sequentially but up 7.5 percent year-over-year.

Intel's view on the PC market comes across as either patient and optimistic or foolhardy and in denial.

Just last week, IDC reported that global PC shipments plunged by 14 percent during the first quarter of 2013, which is the worst drop for the market in a generation.

Gartner's take on the PC market was a little less steep with a 11.2 percent decline.

It is important to note that the market intelligence firm defines PCs as "Desktops, Portables, Mini Notebooks and Workstations." That definition includes netbooks, but it excludes tablets with detachable keyboards.

Garnter's definition consists of "desk-based PCs and mobile PCs, including mini-notebooks but not media tablets such as the iPad."

Intel's definition appears to be all of the above.

Intel chief executive officer Paul Otellini asserted during the call that it is "no longer necessary to choose between a PC and a tablet."

Smith followed up later, stressing that Otellini's point was that the lines between traditional notebooks, convertibles, and tablets have blurred, giving way to a "market of computing."

He continued that analysts and investors should expect an improving economic environment to help out, describing that as "a reasonable assumption" and in line with "normal historical growth."

Smith added that the difference for the PC segment is that now it just consists of "a wider range of devices than previously supported," hinting that analysts should change their own ideas about what the PC market comprises.

Topics: Tech Industry, Hardware, Intel, Processors, PCs, Windows 8

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

85 comments
Log in or register to join the discussion
  • Good Move, Intel

    Now that Intel got word that Windows Blue may very well not completely be DOA, they are predicting the PC market will rebound. I agree. Tablets are somewhat of a fad too, and all fads die off at some point. Tablets were available long before the iPad, and hardly anybody used them. As soon as they were cool to use, everybody started using them.

    The life cycle of a PC lasts up to 10 years, due to the fact that memory increases and CPU speed increases have undergone a slowdown after the year 2000. This life cycle may be even longer as we move into the future. People who run scientific applications and games can never have enough processing power and RAM. The PC is here to stay, and I hope Intel and AMD both tap this lucrative market, and make the fastest processors they can invent for the foreseeable future.

    I don't pay much attention to what Gartner or IDC says. I wait until I can see real numbers in real time, because multiple elements in this world can change at anytime.
    zealaudio
    • Tablets have a place

      but as more people use them and realize they're not ergonomically friendly, rely more and more on storage they have no control over and by providers that might take and profit from the customers' data...


      You're certainly right; the power desktops provide will never go away. Their use will be diminished, but the media overly hyping they are going to become extinct is the most irresponsible and brainless form of pretentious hyperbole...
      HypnoToad72
      • Yep, I agree with both posts

        Every time something new comes out is supposed to replace everything else, no matter how relevant/irrelevant the usage patterns are. So tablets will replace the desktop…because? No they won't.

        What tablets did replace is some desktop usage patterns (and will continue doing so). Just browse the internet on your sofa, watch a movie and play a game while on the go etc.

        Of course there are also those idiots who think they know better and try to force the tablet usage patterns to everything, first one that comes in mind, Microsoft.
        mil7
        • +1

          agree on that!
          Erwin.Craps@...
        • It's not just in the consumer end of it either.

          20 years ago, Gallium Arsenide (GaAs) was "supposed" to replace silicon.
          Today, how many people outside of semiconductor technology circles even know what it is?

          The best assumption is always that the analysts and the experts are going to be wrong. At first, the chief technology officer of IBM said "the world market for computers is about six." Then they said "the mainframe will never go away, PC's are just a fad." Then Steve Jobs got so excited about the mouse that Apple computers didn't have arrow keys on the keyboards for a while. Then there was the dot com boom, where everyone believed that the growth in technology would never stop making people infinite moneys and that even the fleas would have internet connections. Going back, there were people ranting and raving about how we were going to hit another ice age because aerosols were going to block all the sunlight.
          Jacob VanWagoner
      • It's sort of funny when they predict the demise of the PC.

        It's like they may as well headline their article with "I am going to be out of a job soon and I want to help it happen faster".
        mrefuman
      • Computing ergonomics

        Desktop computing will always have a place. User interface is more than just the face. It's the whole body.
        As a chiropractor, I see more and more people with upper back/neck complaints from hunching over any device (lap top, net book, tablet, smart phone, etc) in which the keyboard/mouse (hand interface) and screen (eye interface) are not separated by a least a foot or so. If you're going to be doing any work for more than a few minutes you need to be able to sit up straight, feet on the floor (or a bar on your chair) keep your arms by your side with your elbow angle at about 70-90 degrees and have the top of the screen at about eye level. Then you need to get up and move around from time to time anyway. Only desk top computing fits your body ergonomically.
        There may be a lot of hunchbacks in our future.
        RSBerman
    • I agree completely.

      I think it's the short lifecycle of the tablet that will cause a PC rebound. I don't think it will be as early as the end of 2013. Tablets are limited in both hardware and software upgrades. My Samsung Galaxy Tab has been replaced by the Galaxy Tab 2 which now is the focus of the Samsung line (oops that was till the 7" came out). I bought a Windows 8 laptop on Black Friday and the Samsung has only been turned on twice and once to be used as an alarm clock. I would rather spend $ 1000 for a machine i can keep 6 years then a $ 400 device that will beg for an upgrade every 2 years.
      Orlbuckeye76
    • A weak attempt at self fulfilling prophesy or simply plain old denial?

      When a lion's share of Intel's revenue is hardware for PC's does anyone really expect Intel to say there is going to be a continued side in PC sales? The dominant mobile platforms are not running Intel CPU's, Intel's major partner for the mobile market is Microsoft and their Mobile market share is still in the 'who cares?' range. Netbooks may disappear but tablets are not going away and they are chewing into the market share that used to be supported by laptops. I will be replacing my 10 year old PC soon and probably will install Windows 7 or Windows 8.1 if they stop forcing Metro on me, but the PC Market will never be what it was during the Bill Gates golden years.
      balsover
    • The iPhone4 sales plunged right before the iPhone5

      People are waiting for the next cool thing. The next cool things are fanless x86 processors. I'm loving the Envy x2! Truly the biggest development since some one crammed a PC into laptop size 25 years ago. Technology finally has allowed such a workable product.
      LarsDennert
      • fanless x86?

        Well we already have those, most of the embedded x86 cpus from both Intel and AMD (and VIA for that matter) are designed for a fan less configuration. And, many of these embedded models are approaching mid range desktop performance. In fact... there have been full on fan-less desktops available for... ever actually, I remember pulling apart some 486 & 386 computers when I was a kid that used 100% passive cooling.

        Either way, the PC desktop is not dead, but it has transitioned from the one device for all tasks, to the one device that mostly does the heavy lifting. There are allot of tasks out there that really aren't suited for the tablet format, including high end gaming, photo editing (though the touch screen is nice), video editing, writing, web design, mathematical simulations, CAD, etc etc.

        Some also say its more about the popular trend, that most people want tablets over PCs. Its not that they want to OWN tablets over pc's, its that they already own a PC and need something smaller to take with them.

        I would never give up my desktop for anything. In fact, the only portable device I use is my galaxy s1, and its ancient by comparison. I have others... but they really don't get used. My PC on the other hand gets an upgrade of some sort every 3-6 months. It already has far more power then I can utilize In my day to day usage. But occasionally when I need to edit 45gb+ of 1080p video, or melt the virtual skin off some zombies with a flamethrower, that extra power comes in real handy.
        rockfanMCE
  • Processor Power and Demand For Energy

    Current x86 processors require much more energy demand and generate more heat than Arm processors. However, if the Haswell processor can make significant reductions in heat and energy demand, than market demand could change significantly.
    nztjbv116
    • Comparing apples and oranges

      An atom tablet running Windows 8 can get almost the same battery life as an iPad.

      Obviously the power use isn't all that much more.

      They also don't require fans, so obviously there isn't a huge heat difference either.
      Michael Alan Goff
      • In what world?

        "An atom tablet running Windows 8 can get almost the same battery life as an iPad."

        I've never seen any Intel-based tablet get more than 5-6 hours on a battery charge. The ARM based tablets routinely get 10-14 hours. That's a very wide difference for them to be called "almost the same."

        Frankly, I think Intel's prediction is wishful thinking. In the past few years, vast numbers of consumers have learned that they do not need Windows or Intel in order to get an easy-to-use, portable device which lets them do everything they need and much more. This paradigm shift is what is affecting PC desktop sales more than anything. People now realize the Intel/Microsoft duopoly isn't the only game in town. For the first time, the 90% have valid alternatives which fit into their mobile lifestyles better.
        BillDem
        • I do it all the time

          My first Intel tablet was the Samsung Ativ 500t. Forgot my charger over a weekend trip and managed to get almost 12 hours out of it.

          Levono Yoga 13: I have hit over 7 hours and it runs a Core i5.

          HP Envy X2: 8 hours on just the tablet without even trying.

          Granted I think Apple has better battery management on its mobile devices than most Androids and probably all Windows devices, but not so much as your claims. Credit their process of designing the hardware and software.

          Keep in mind this is what Intel was able to achieve without specifically designing these chips to compete in the tablet market.


          Also, I think you are right that iOS/Android has opened up more possibilities to people than they have had in the past. Most of that due to the interface and hardware form factors than the actual operating systems themselves. Personally I think the operating systems are the limiting factor in those devices which limits them to companion devices to PCs for 90% of the people you are referencing.

          As we see pricing, form factors and other aspects of these devices even out between Apple/Android/Wintel devices it will be interesting to see what happens.

          All I can say is that after owning iDevices and Android for a few years and now having an HP EnvyX2 has been a liberating experience. It really has exposed how many compromises there are in the mobile operating systems used on those other devices.

          Just web browsing alone is a huge improvement. No more dealing with content hacked down to fit into a mobile web page or lack of other media content that isn't supported by iOS/Android. I honestly cannot believe people have come to accept that from their devices.
          Emacho
          • Bill Dem

            Like Emacho, we can talk from personal experience. I have owned a Galaxy Tab 10.1 almost from the start. I also still have two Samsung Galaxy Smartphones in our empty nest two person household. The wife started wanting equal time on the tablet she used to scoff at. So I bought a Lenovo ideapad with keyboard and it had too many limitations too. See I had a dedicated Galaxy specific bluetooth keyboard a cover already. The MS Office "compatible" programs on android really weren't. So I returned that and got the surface RT with keyboard. Now the plan was still for her to get the Galaxy and I would learn the new system. We already bought four Win 8 pro licenses (14.99) and upgraded our then high end laptop, and three desktops, one each and the one in the entertainment center. We already reverted the two main desktops to Windows 7. I got the Surface used and one month old, for $200.00 less than the person selling paid. Since he had all the documentation and never registered it we got the full warranty. I lived it but was disappointed that it did not have outlook, nor could handle pop3 mail or IMAP mail, so I could not use it. I decided to let her have it if the next attempt failed.

            I bought an Envy X2. I am on it now. In the month since I got it I can't believe how perfect it is as a tablet, and as a laptop with the traditional keyboard and touch pad which can be turned off for those who prefer a mouse.

            It is extremely obvious whose comments come from experience and ownership, and whose are comments based on personal ignorance and reading FUD.

            I sold the Galaxy and all the accessories to a friend, sold the high end laptop and netbook, and now have the X2 which is the best notebook I have ever owned with all of office 2010 loaded. It gets as much or as little battery life as my Galaxy. both would go about five hours watching streaming movies, and both will go about ten hours of normal use. Boot time is about ten seconds, and I can get my IMAP mail on it.

            I have used both for months now and the Galaxy since January 2012. I concur with the previous. I have two high end fairly new desktops, and one that is now only a backup. We don't need an entertainment center PC because my X2 can hook up to my external drive dock for all our digital movies and either play with headsets for one, or hook up to the big HD plasma via HDMI.

            So now we each have a touch 8 machine and love them both. As a result I love the tiles and touch, and ordrered two Logitech T650 wireless touchpads and am learning it since yesterday. It takes its own learning but now that I have learned how much faster and easier touch makes Windows 8, I prefer the tiles and removed Classic shell from my remaining Windows 8 computer. While too soon to tell, it looks like we will be going back to Windows 8 on my desktop, and as soon as we get Quicken updated for Windows 8, hers too. The touchpad seems to get me 3/4s of the way there.

            If one has 7 already and no touch, it may not be worth upgrading. But if you do, with classic shell you go straight to the desktop and have a start button. It works well. For those fearful of 8, don't be. Once you learn to search with the charms, and use the settings to shut down, it is an anticlimax. See the thing is it works as well as 7 that way, AND for mobile devices. I can't wait for a Windows phone to be available for our Straight Talk service using the Verizon network.

            Then we can be rid of Google who make nothing really. Their money comes from selling our data and targeting advertising.

            But for those that actually use the hard and software we as discussing, both Android, MS, and yes Apple, the people who haven't a clue are as apparent as those who post their hard drive came in DOA because their computer could not see it, and didn't understand bare drive, nor initialization.

            I agree that like all before, most will only drop XP next year, and some clueless ones will continue to use it and with no security support will point to their systems as proof Windows is the problem, not the criminals looking for chinks in their armor.
            AreV
          • Cost?

            Forgot.
            The X2 replaced a high end laptop and netbook, as well as a Samsung tablet. Add up the cost of a good tablet, SSD ultra book, and a small form factor netbook. It is then that the sale price of $525.00 was a bargain. I was also surprised at how snappy it was. I played with a friend's Yoga and it is spectacular for those who need a top line desktop replacement.
            AreV
        • Who is being wishful?

          The average user doesn't care whether it's Intel, ARM, or whatever. "they've learned they don't need intel or Windows"? No, they've found cheaper devices.

          As for tablets getting 10-14 hrs... what are you talking about? What is this tablet, one that isn't a docking one, that gets 10-14 hours of normal use? The most recent iPad is marketed to get "up to 10 hours on wifi".

          And, if you read, I said that it could get "iPad level battery life".

          As for your examples, I do believe that you'd be using the atom tablet differently. If you run one ragged and use one app at a time on the other? Not exactly fair to anyone.
          Michael Alan Goff
        • Another post that refuses to focus.

          BillDem says:

          "In the past few years, vast numbers of consumers have learned that they do not need Windows or Intel in order to get an easy-to-use, portable device which lets them do everything they need and much more."

          That is such an odd odd statement because it sounds proper at first, but really thinking on what it says makes it fall apart where it counts most.

          Firstly, tablet purchasers may well come in hundreds of different types, but in very general terms you can break it down to three groups that include every single one of them and suddenly, a very interesting reality pokes its head out from the FUD layer so many have tried to keep up since tablets went big time.

          Firstly you have the smallest group of the three of all. There is a group of non-Windows users, or at least individuals who’s first choice of OS is not Windows, even if for reasons particular to their situation they find themselves compelled to use Windows at certain times. This particular group of non-Windows users are in fact a particularly special group of non-Windows users and not simply all non-Windows users. This particular, fairly small group of non-Windows users, who just do not regularly use Windows, they are individuals who don’t like Windows, or usually even Microsoft itself and actively seek to select computing devices that have nothing to do with Windows or Microsoft if they can at all help it. In pretty much all cases where there is any viable alternative to a Microsoft product, they will purposely select non-Microsoft products because they have distaste for Microsoft products and Windows in particular.

          The reasons for their distaste of Microsoft products in this conversation is irrelevant, it’s just that this is the first rather small group of tablet purchasers I am talking about. Its also notable that because this particular group I am talking about do not like Microsoft or Windows at all, they are typically very vocal about that. Understandably they have no reason to keep their distaste a secret and they don’t. This is virtually a group that’s far more IT savvy then the members of group number two by quite a margin and certainly far more than members of group three on the average. They are far more likely on the average to be found in the IT industry or at least have a better than average knowledge of IT. This makes sense otherwise it would be difficult to figure out how they know so much about how and why they came to dislike any particular manufacturer or IT product of any kind. In otherwords, grandma Jones down the street who dosnt have a clue, will never hate any particular product because she hardly, if at all knows the difference anyway.

          So this group, in no way has "In the past few years, vast numbers of consumers have learned that they do not need Windows” because unless they just recently came to their beliefs, they haven’t liked Microsoft or Windows to begin with, so the idea they have just discovered this is ludicrous.

          The second group; number two. This would be a group that is almost certainly a little lager than the first group of Microsoft/Windows haters. This group has a few characteristics of their own. They would have to be a group that in fact for some odd reason did think they needed Windows and Intel to “in order to get an easy-to-use, portable device which lets them do everything they need and much more." They would have to be a group that by definition of this odd statement of BillDem have found their device lets them do everything they need and more. Despite the fact this group is likely larger than the Windows hater group, by the things that necessarily define the group they still cannot be that big out of the multi millions who have purchased tablets. This is partly due to the fact that they have to have some significant IT savvy or they would never have been thinking that much about Windows being so necessary in their minds. The relatively clueless don’t sit around thinking “I cant get a device that’s not Windows operated”. The relatively clueless just go out and purchase whats available and to a large degree know little about differences in OS’s generally to start with. Many don’t have even a half decent understanding about OS’s at all. This group is the group that literally by definition fits BillDems statement by sheer definition of what he is saying. Not that big a group over all.

          The third group is all others.

          Unfortunately, all others are a group who dosnt think about OS’s much at all for the most part. They just buy whats on the shelf so to speak of the kind of device they think fits their needs best at the price they best hope to pay. Often hugely influenced by smart advertising and what their friends purchased recently or what they seen on the streets or during their local bus trip to work. Most of these people actually don’t care much either way, and they really havnt discovered much of anything about what they do or do not need for an OS or not or who made the OS and could just as easily purchase a Windows product the next time they upgrade their product if its come to their attention by way of advertising or what their friend or relative purchased. Once one understands the simple truth about the hundreds of millions of Joe Averages in the population it shows how fragile the massive edge both Apple and Android can be in this market.

          Now while smartphones almost always get a lot of use, largely because they text and phone, its not the same with the Joe Averages and their tablets. Those from group one and two, the often vocal minority don’t realize that the majority who are not in their tech savvy world often have their tablet sitting like a paper weight on the coffee table at home because much like netbooks they quickly discovered that tablets are not miniature versions of the laptop or desktop they are used to using at home and work. They are largely handy little gadgets for the large part and the users really gained none of BillDems claimed marvelous insight that they don’t need Windows. In fact the truth is millions without even realizing it have actually discovered the reason why the tablet they spent $500+ for isn’t exactly all they hoped for is because its not a Windows computer.

          So, the long and short of it is, BillDem is largely full of it.
          Cayble
          • Do you actually read what you write???

            You seem to be having a pop at BillDem, but if you stopped long enough between typing your posts and pressing the SUBMIT button, you might have better luck avoiding the largely unintelligible convoluted sentences.

            I refer to an example below:

            - "This particular group of non-Windows users are in fact a particularly special group of non-Windows users and not simply all non-Windows users."

            and here :

            - "In fact the truth is millions without even realizing it have actually discovered the reason why the tablet they spent $500+ for isn’t exactly all they hoped for is because its not a Windows computer."

            BREATHHHHH and place some commas in it..........

            I don't have a problem with people who wish to post large replies, but please take a breath now and then, use punctuation, check the spelling and try to avoid using the same word twice in a single sentence. Oh yes, stop with the clumsy sentences.

            On a personal note, I am one of those individuals who is a tablet user first, then a laptop user (OS X/Windows XP) second. Horses for courses and all that, so roll on and enjoy using it.
            Jackie-Smith