Intel to gain from 'mini corporate refresh' of PCs

Intel to gain from 'mini corporate refresh' of PCs

Summary: Intel's Bay Trail processor will also give it some tablet momentum. Smartphone traction will remain tricky without ARM and an LTE modem.

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Intel was upgraded by a long-time skeptic of the chipmaker on hopes of a enterprise refresh cycle, some gains in Windows tablets and cost cutting.

This "upgrade," from Piper Jaffray analyst Auguste Gus Richard still had plenty of skepticism. First, Intel was upgraded to a neutral, a rating that's not exactly a ringing endorsement. Meanwhile, Richard's note was heavy on Intel's challenges.

He said:

The chip industry is now solidly in the post-PC era, but PCs are not going away anytime soon. We expect a modest corporate refresh cycle driven by the end of support for Windows XP in April 2014 coupled with the release of Windows 8.1 in Q4. In addition, with the 2H13 launch of Bay Trail, Intel now has a low-end processor for tablets with good enough performance for consumers. While this is likely to cannibalize sales of some notebooks, it would replace low-end consumer notebooks not high-end corporate machines. We lift our CY14 estimates slightly and expect 2014 revenue to grow in the mid-single digits after two years of decline.

Richard added that Intel may garner some optimism coming out of its Intel Developer Forum September 10-12.

Add it up and Intel likely has a decent second half coming up and Microsoft's move to end support for Windows XP will mean about 150 million to 250 million machines will be upgraded by corporations. In addition, Intel's Bay Trail processor is strong and gain market share in tablets.

intelultrabook

 

Beyond April 2014 though, Intel's prognosis is tricky. Richard said that Intel's biggest issue will be the smartphone market. Without an LTE modem or ARM processor, Intel isn't likely to get traction.

Richard noted that Intel isn't doomed, but needs to make some bold moves. First, Intel should license ARM and perhaps buy Synopsys to become a direct-to-OEM foundry. Intel could also license its manufacturing technology to TSMC, who has to reverse engineer the chip giant's techniques anyway. If Intel licensed ARM it could offset Samsung's strength in chips, memory and displays and be welcomed by partners looking to diversify.

It's unclear whether Intel will do anything bold. Intel's analyst day Nov. 21 will be the coming out party for new CEO Brian Krzanich and his master plan for the company.

Topics: Hardware, Intel, Processors, PCs

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11 comments
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  • testing

    Can I post here?
    P0l0nium
  • If all the ingredients come together ...

    If MS comes out with Metro Office soon, it could use the end of Windows XP support as a great opportunity to storm into businesses with Windows 8 touch based PCs. Businesses want a compelling reason to move to Windows 8, and I can't think of anything more compelling than Metro Office on Windows 8 touch based PCs, running on a range of Intel processors. Also I think that mini tablets using Windows 8 on Atom chips, with Metro Office, would be great in many businesses. Users could walk around in and out of the office with the devices and use them to communicate via Linq / Skype, view / annotate documents, take notes during meetings, record meetings, have impromptu collaborations, etc.
    P. Douglas
    • WindowsRT

      Windows RT users can already do all that you've proposed above: Windows RT runs Skype and Lync, Runs (almost) full Office (including Outlook in Windows RT 8.1).

      Also, if Microsoft do ever release a modern (nee "Metro") version of Office, then it'll run anywhere (Intel / ARM). This is the whole point of the modern app experience - modern apps are generally processor/architecture agnostic and should run with little/no code change on either ARM or Intel based devices.

      That said, Intel's chips are increasingly competitive with ARM's. Intel's current range of Atom chips are already pretty competitive with ARM's higher-performance Cortex A15 chips and will continue to become even more competitive as they continue to shrink their process.
      bitcrazed
      • Oh ...

        ... and before I forget, note that Intel already has an ARM architectural license (http://www.zdnet.com/blog/computers/intel-we-have-arm-license-no-plans-to-use-it/5845)

        They also used to make (Strong)ARM chips before they sold that division to Marvell.
        bitcrazed
        • Marvellous

          !
          bufbarnaby1999
      • It's not worth it

        If you are going to sell Windows 8/RT PCs to business, it is a given that you need to sell them Windows 8, because backwards compatibility is extremely important to companies. Why should a company struggle to sell Windows RT PCs to business, when it is so much easier to sell Windows 8 PCs? If you sell a Windows 8 PC to a business or even consumer customer, and the customer doesn't need backwards compatibility, where is the significant loss? On the other hand, if you sell or try sell a Windows RT PC to a customer, and the customer needs backwards compatibility, the customer is going to get angry, confused, send back his PC, etc., and this will cause the PC maker a sale, its reputation, customer support expense, etc. If MS had come out with an Atom version of Surface instead of Surface RT, it almost certainly would not have incurred the costly write off it suffered the last quarter, and sales would be much better than they are now.

        Windows RT is a significant handicap to the Windows ecosystem. It is right now doing much more harm than good, and it is a costly indulgence the Windows ecosystem can ill afford. If Bay Trail manages to be very good, then I believe overall it would be better for MS to possibly sell Windows 8 tablets to consumers with a switch that disables the desktop by default. If Grandma gets a tablet, she can just use the device with the Metro UI and be blissfully unaware of the existence of the desktop. If Grandma's son is a power user, he can just go into Settings, and turn on the desktop switch, and install the legacy Windows software he needs, and be as happy as ever. At this point, I think MS should quietly faze out Windows RT.
        P. Douglas
  • Yeah, Right!

    Intel needs to :-
    a) Abandon its Intellectual property (x86 + extensions)
    b) Tell the competition how to make 14nm FINFETs.

    What colour is the sky in Gus Richard's world ?
    P0l0nium
  • Intel used to have an ARM licence....

    It had the StrongARM (originally from DEC) and XScale designs. It sold that business because it couldn't make enough money out of it....
    Jack Schofield
  • What kind of ranting fool thinks licensing arm will

    help Intel compete with Samsung in the memory and display markets? And as far as the processor market goes airmont is a much better choice for OEMs. Give me an Intel based smartphone any day over an arm one. Same goes for tablets, ultrabooks,laptops, desktops, all in ones, and servers.
    Johnny Vegas
  • Bay Trail...

    Is a winner !
    Airmont will be even better.
    bufbarnaby1999
  • Intel...

    Is the KING of the fab.
    bufbarnaby1999