Intel's fourth quarter results and outlook were upbeat, but the future can be boiled down to three words: Datacenter, tablets and netbook reinvention.
What strikes you about Intel's quarter---beyond the optimism of CEO Paul Otellini and how 2011 is the year "everything gets better---is that there are two sure-things (data center and PC cycles) and a big wild card in tablets. If Intel's Atom-based tablet strategy works---and we'll know next year---the chip giant is in for one helluva 2011.
Here are the top three themes from Intel's earnings conference call.
Intel servers dominate and there's a data center cycle to ride. Otellini said:
So what is driving this growth in servers and will it continue? Let me share with you some data that can help put the server market in perspective. In 2010, total traffic crossing the Internet was roughly 245 exabytes. This is greater than all the previous years combined. Over the next five years, 1 billion more people will join the global online community with 15 billion new connected devices, including PCs, smartphones, tablets, embedded devices, and smart TVs. We estimate this will increase the data footprint across the Internet to over 1,000 exabytes. More people; more devices; more usages. This dynamic will require high-performing servers from Intel for years to come.
And it's not just servers. Intel continues to grow its presence in the data center with processes for storage systems and networking infrastructure. With plans to refresh the entire Xeon server product line in the first half of 2011, Intel is very well-positioned to benefit from the growth of the data center and the build-out of cloud computing.
Intel's tablet strategy is a work in progress, but could work. Otellini said:
In 2011, you will also see Atom in a wide array of tablets, running three different operating systems -- Windows, Android, and MeeGo. Seven of these tablets have been announced by their manufacturers, with many more in the pipeline for roll-out this year. In 2011, you will also see Atom processors appear in smartphones, operating at very competitive power levels with performance that will lead the industry, demonstrating Intel's advantages in this most important category.
Otellini added that Atom will run multiple operating systems for tablet makers. He added:
One, we believe that we will offer higher performance in comparable battery life configurations. And number two, by designing an Atom-based tablet, they have the opportunity to run multiple OS's on it -- which is, I think, a unique value proposition with Intel at this point.
Netbook sales will continue to chug along. Intel projected another strong year of growth for netbooks. However, there will be some reinvention. Otellini said:
In 2011, Intel plans to bring some unique innovations to netbooks to keep the category growing, including increased feature sets in products for mature markets and lower price points in emerging markets that will attract first-time buyers.