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Intel aims to reign supreme over tablet market

Posted: 20 Oct 2010     Print Version  Bookmark and Share

Keywords:tablet PC  processor  chipset 

Paul Otellini, CEO, Intel Corp. has made the company's intentions very clear about the tablet PC segment which Intel is set to conquer. He made the statement in a conference call during which the company reported record Rs.51,832.59 crore ($11.1 billion) Q3 10 revenues and record unit sales of microprocessors.

"We will use all the assets at our disposal to win this segment," said Otellini , while reporting three per cent sequential quarterly growth in desktop and server CPU sales and strong growth in its embedded markets. However, consumer markets were soft and Atom processor and chipset sales fell four per cent sequentially to Rs.1,849.16 crore ($396 million).

When an analyst suggested that the rise of the Apple iPad affected Intel notebook and netbook sales in the quarter, Otellini responded that even sales of as many as eight million iPads in the quarter was "a secondary factor" compared to shipments of 7.00 crore notebook and netbooks in the period.

Otellini noted that "No one knows how much cannibalisation there is in tablets, but the numbers are relatively small," said Otellini. "In the end, the tablet category will add to our bottom line, not take away from it." He said the company would be announcing Intel-based tablets running Android, MeeGo and Windows in the coming months.

"You have to take his statements with a grain of salt," said Leslie Fiering, a research VP at market watcher Gartner Inc. "ARM is still more cost effective and more sophisticated in comms [than Atom], and [Atom's] high performance is not really a huge demand factor with tablets which are more about convenience, long battery life and light weight," Fiering added, noting that "Atom could be competitive in this space, but it's not a foregone conclusion."

Solid results
Intel was praised for achieving solid results during this time of slow economic recovery. "It's remarkable Intel pulled out a great results in an unremarkable quarter—you have to give them credit for that," said Fiering.

Intel now estimates it could hit Rs.2.04 lakh crore ($43.6 billion) in annual revenues in 2010, an all time high, said Stacy Smith, chief finance officer, Intel. It earned Rs.14,008.81 crore ($3 billion) in profits in Q3 10, in part based on tight management during a period of flat average selling prices for processors.

Intel expects to report 66 per cent gross profit margins for 2010, a record for the company.

Otellini remarked that the market is "filled with uncertainty" with 2010 not showing typical seasonal trends but exhibiting slow, steady growth, especially in business computing and embedded markets. Smith said Intel's sales of processors outside typical PC markets hit Rs.2,334.80 crore ($500 million), up 50 per cent from a year ago.

Overall, Otellini is optimistic about Intel's core computer markets, projecting 12 to 18 per cent growth in 2011. The industry is now shipping a million computers a day, he said.

"I cannot look at those numbers and say anything but it's a pretty healthy state of affairs," he said. "Assuming modest growth and not a double dip recession...[the computer industry] will have a pretty strong year" in 2011, he added.

- Rick Merritt
EE Times

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