Intel Poised For Mobile Push
Intel, the largest chipmaker, has been aggressively pushing into smartphones and tablets, as it seeks to take market share away from ARM Holdings (ARMH) , which has a 95% market share in smartphones, according to its 2011 annual report.
|Intel reports first-quarter earnings today|
At the 2012 Consumer Electronics Show, Intel announced it had signed deals with Motorola Mobility (MMI) and Lenovo using its "Medfield" line of chips. Morningstar analyst Andy Ng noted that Intel has also signed deals with ZTE, Orange (the wireless unit of France Telecom) and Lava.
Check out TheStreet's recap of the 2012 Consumer Electronics Show.
Jefferies analyst Mark Lipacis believes investors will also want to hear about the company's Ivy Bridge and Romley line of chips, used in mobile computing and servers, respectively. "We expect investors to focus on the ramp of Ivy Bridge (22nm platform), particularly on the mobile MPU front since the company indicated a slight delay on those products. On the server front, we believe that Intel has started to ramp its Romley platform, which should provide visibility into revenue growth and support elevated gross margins in the near term," Lipacis said in his note. He rates Intel shares "hold" with a $27 price target.
There will also be plenty of attention focused on the company's capital expenditure spending, and how that might read through for the rest of the year. Lipacis notes the company previously said it expects to spend $12.5 billion in capex this year, and any positive demand trends from Intel's report "would likely translate to positive trends for AMD(AMD) as well."
Investors will want to hear what Intel CEO Paul Otellini and his team have to say about the company's push into "ultrabooks." Ultrabooks, a term coined by Intel, are designed to compete with Apple's(AAPL) MacBook Air, offering consumers a new breed of super-skinny laptop.
CLSA analyst Chitra Gopal, however, does not see ultrabooks as a threat to the Macbook Air, despite prices reaching as low as $699 on some models. "Meanwhile, touchscreen ultrabooks are on track for the second half of 2012 and Windows 8 tablets will likely be launched in the fourth quarter of 2012," Gopal wrote in a research note. He does not have a rating on Intel.
Ultrabooks were mentioned by TheStreet as one of three signs for a 2012 tech boom.
Gartner's(IT) preliminary results for traditional PC shipments were 89 million units in the first quarter of 2012, down 6.7% quarter-over-quarter, better than the 9.5% drop Gartner was expecting.
Credit Suisse (CS) analyst John Pitzer noted that preliminary PC data from Gartner was better than expected, and believes that the preliminary data could imply upside for Intel, as well as a reduction of inventory. He rates Intel shares "outperform" with a $35 price target.