22 April 2011

Is Intel on the burning platform?

On the outset, a company that just made $13 billion in a quarter seems to be far away from fire. But recent developments in consumer electronics means that if there is any company that is feeling the heat at this moment, it is Intel. Here's a look why,

  • Declining PC market. Its no secret that Smartphones and tablets are quickly displacing PCs, a space that Intel has dominated for years. In simple terms, Intel's addressable market is shrinking.
  • Dominance of ARM in mobile. While Intel dominates PC, its power friendly ARM based counterparts have beaten them hands down in the ever growing mobile market. Intel has been both late and slow and its current  line of Atom chips have failed to create any impact.
  • Windows on ARM. Microsoft's announcement to unlock itself from Intel in appreciation of the growing mobile market on ARM is no good news either. More and more enterprises are looking to adopt tablets and though they still would look to stick to Windows for compatibility, their dependence on Intel is longer implied.
Though the future looks gloomy, their game is far from over. Let's have a look at the growth areas for Intel. 

  • Cloud computing. As more and more of our content moves to the cloud, future for Intel's data center and cloud computing businesses is very bright. Their ever powerful processors and equipment would remain default choices for powering those servers.
  • Emerging markets. PC and enterprise hardware penetration is low in these markets and would represent the next area of growth. Its already contributing to more than 50% of their sales.
  • Apple Mac. If its any consolation, Apple's healthy Mac sales in developed markets will keep adding to their bottomline.
On the whole, it would be silly to count out the mighty Intel from the game yet. But their is no doubt that the coming couple of years would be very challenging and they would have to really up their game on mobile to remain relevant in the future that looks full of smartphones and tablets.

No comments:

Post a Comment