Business Tech

Intel to showcase new chips as investors eye stagnant PC sales

07 Sep 2012 - {{hitsCtrl.values.hits}}

Intel Corp will tout a new generation of processors next week that consume less power, hoping to reinvigorate a stagnant personal computer industry and soothe increasing concerns about its growth.

Wall Street is reassessing its outlook for the top chipmaker after Hewlett-Packard Co and Inc warned last month of weak demand for PCs.

At least eight analysts have reduced their revenue estimates for the dominant PC chipmaker since August 23, pointing to poor economies in Europe, the United States and China, as well as the growing popularity of mobile gadgets.

"The risk of a (negative) preannouncement is extremely high at this point," said Patrick Wang, an analyst at Evercore Partners. "I think the supply chain is reeling at the elevated levels of inventory out there."

The top chipmaker is banking on Microsoft Corp's much anticipated launch of its Windows 8 platform in October to help slow the growing numbers of consumers buying smartphones and tablets instead of personal computers.

Devices running Windows 8 and powered by Intel's latest components will be a major draw when thousands of technology professionals descend on the annual Intel Developer Forum in San Francisco next week.

LOW POWER

Analysts on average expect revenue of $14.2 billion when Intel reports its third-quarter results in October, still well within the company's forecast of $13.8 billion to 14.8 billion according to Thomson Reuters I/B/E/S.

But in a further sign of growing investor caution, the ratio of put options for Intel shares to call options has risen close to highs not seen since 2006, said Jim Strugger, a derivatives strategist at MKM Partners.

Fears of slowing global PC shipments have helped push Intel's shares down about 11 percent since the end of April.

At the forum, Intel's next-generation PC processor, codenamed Haswell, will be front and center, with executives talking up improved power performance letting future laptops stay on longer without needing a recharge.

Haswell, due to appear in a crop of laptops released for next year's holiday season, will improve on computing and graphics features and is targeted to slash electricity consumption from 17 watts to 10 watts, according to Intel.

Intel is also expected to show off a range of Ultrabook laptops powered by recently launched Ivy Bridge processors, as well as hybrid devices with screens that detach from keyboards to be used as tablets.

Intel's processors are used in 80 percent of the world's PCs but the Santa Clara, California company has been slow to adapt its chips for smartphones and tablets and now trails Qualcomm Inc and Samsung Electronics Co Ltd, which design their chips using power-efficient technology licensed from ARM Holdings Plc.

The combined market for PCs, smartphones and tablets is expected to almost double over the next four years, but Intel's share of the processors used in them will dip from 35 percent to 29 percent, according to a report this week from IHS iSuppli.

Underscoring mobile gadgets' heft in the tech industry, Apple on Wednesday will become a distraction for participants at Intel's forum when it holds a nearby event where it is expected to launch its newest iPhone.

MORE AND MORE CHOICES

The upcoming introduction of tablets running a version of Windows 8 designed to work with ARM-based chips is creating additional uncertainty for manufacturers trying to predict what kinds of new devices will catch on with consumers, said Vijay Rakesh, an analyst at Sterne Agee.

Previous versions of Windows worked only with "x86" chips made by Intel and smaller rival Advanced Micro Devices.

"The issue is, can we have x86- and ARM-based systems? That's still a question mark," Rakesh said. "And then, what is the pricing of these systems versus the iPads and Kindles and other tablets that are out there?"

Intel's new Medfield processor, showcased in phones launched this year in Russia, India and the United Kingdom, surprised some critics who believed the chips would consume too much power.

Motorola Mobility, owned by Google Inc, is expected to unveil an Intel-based smartphone in London on September 18, the first of a multi-device agreement with the chipmaker.

"They have a respectable seat at the (mobile) table because they surprised a lot of people with Medfield and just how well that did perform," said Patrick Moorhead of Moor Insights & Strategy. "Their big chance to get more credibility will come with Motorola."

(Reporting By Noel Randewich; Editing by Richard Chang)

(Source : Reuters)

Business Tech

Intel to showcase new chips as investors eye stagnant PC sales

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