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Intel CEO predicts rock-bottom prices will fuel PC growth

Cliff Saran

Intel CEO Paul Otellini expects PC manufacturers will introduce thin, touch-enabled laptops costing as little as £130, which could stimulate demand for new laptops.

Computer Weekly has reported companies that use Intel processors – such as Dell and HP – are suffering due to poor take-up of new PCs. Reflecting the state of the PC market Intel’s Q1 2013 financial report showed revenue in its PC client group of $8.0bn, down 6.0% year-on-year.

In an earning call transcript posted on the financial blogging site, SeekingAlpha, Paul Otellini said Intel would continue to thrive.

“Even as I prepare to pass the baton to a new generation of leadership, I know Intel’s story is nowhere near completely written." Otellini said. "I’m confident that Intel will continue to invent, grow, thrive and deliver the best technology to a world increasingly hungry for the products of the microprocessor revolution.”

Revenue in its datacentre business was $2.6bn, up 7.5% year-on-year. Overall, revenue was down 7% at $12.6bn.

In spite of the poor shape of the PC market, Otellini predicted that the take-up of touch-enabled devices, that the industry has been waiting for, will arrive once prices fall. 

He implied this demand would fuel growth for Intel chips within its PC client business. 

“I think people are attracted to touch and the touch price points today are still fairly high, but they are coming down very rapidly over the next couple of quarters,” he explained, when questioned about poor sales of Windows 8 touch-enabled devices

He claimed that Haswell, the next generation of 22nm core processor after Ivy Bridge and Bay Trail, will significantly lower the cost of mobile computing.  

“Looking at new form factors that they can design around our new chips, Haswell in particular and maybe Bay Trail, and Windows 8 enabling touch, the explosion in form factors and the competitiveness of that platform is going to be substantially different, at price points down into the $300-$400 range enabling touch,” he said.

Otellini predicted that some PC manufactures would offer even cheaper notebook PCs to fit a gap in the market that has been taken away by the demise of sub-£250 Netbook PCs. He said: “If you look at touch-enabled Intel based notebooks that are ultrathin and light using non-core processors, those prices are going to be down to as low as $200 (£130) probably.”

Analyst IHS predicted the PC market would improve in the second half of the year, as new mobile products like ultrathins and Ultrabooks drive market growth. Global shipments of ultrathin and Ultrabook PCs will nearly triple in 2013, mostly driven by increased sales in the second half of the year, according to IHS.


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