Intel plans to grow tablet volume from 10M to 40M in 2014

Krzanich admitted that enterprise figures didn't live up to expectations because Intel "overestimated the rate of recovery among corporate buyers."


Following a mixed fourth quarter earnings report, Intel had many demanding questions from analysts and investors on Thursday regarding what executives described as "a solid finish to a challenging year."

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Intel CEO Brian Krzanich admitted that enterprise figures didn't live up to expectations because Intel "overestimated the rate of recovery among corporate buyers." He followed up later during the Q&A session to expect "a slower recovery in enterprise over the course of 2014."

The processor giant reported earnings of 51 cents a share on revenue of $13.8 billion. But Wall Street was looking for earnings of 52 cents a share on revenue of $13.72 billion. Analysts had been particularly counting on strong data center results.

As a result, Intel shares took a dip in after-hours trading.

But Krzanich remained optimistic about 2014. Like with many new year's resolutions, the key is usually successfully managing balance.

From chips to datacenters, Intel has a lot to balance, to say the least.

Perhaps to make up for some of the slips seen in the Q4 report, Intel will be doubling its mobile efforts.

We've already seen some of what Intel has in store in this regard, with a bevy of connected technologies unveiled amid the Consumer Electronics Show earlier this month.

Krzanich also pointed towards tablets, adding that Intel hopes to grow tablet volume to 40 million units this year. The chip maker finished off 2013 with more than 10 million units.

Thus, that's a big leap in one year, but it's not unrealistic.

For one, there are countless forecasts (including some from Intel itself) projecting the exponential growth of mobile devices (especially tablets) from now through 2020.

Krzanich also noted that Intel plans to have approximately 70 more new, unique 2-in-1 designs ready by back-to-school season. And then remember Intel's tablet footprint grew significantly more during the second half of 2013 too.

Intel leadership appears pretty confident that the 40 million target is on point, even as analysts questioned if there was a fall-out plan in place just in case. Krzanich responded:

So this isn't a price reduction as a normal price reduction would be. It's not where you just simply reducing it. It's truly a bomb cost equalizer and remember a lot of our 40 million tablets in '14 will be based on Bay Trail. Bay Trail was originally designed for Atom-based PC segment and the upper end tablet. And so what we're doing here is doing a bomb cost delta relative to the -- you know, what the mid and lower end tablets require. And so those are things like Bay Trail may require more layers of a printed circuit board for the board itself, more components on the board, tighter power management controls and things like that. We have a whole program to reduce those throughout the year, so that gives us confidence that as we go through the year, the bomb cast delta will shrink. But if the volume didn't show up for some reason, and I'm not going to say that that's what's going to happen, but I'm confident it will. But if it didn't, it's on a per unit basis and so the spending on that would be reduced equivalently.