Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Intel's Mobile Push: The Jury's Still Out


Intel (INTC) investors are hoping that the world's largest chipmaker will shed light on its ability to grow amidst a sagging PC market when it delivers its fourth-quarter earnings on Thursday.

But some analysts are skeptical the company's efforts will pay off in the mobile device space, where it is concentrating a large portion of its efforts.

Related Links


Intel previewed some of its emerging strategy at CES last week where it showed off super thin and powerful laptops, dubbed Ultrabooks. Built around Intel chips, Ultrabooks are designed to compete with Apple's (AAPL) stylish MacBook Air.

Intel also announced smartphone deals with Lenovo and Motorola Mobility (MMI) as the chipmaker tries to move outside its core PC computing business into powering mobile devices.

Some analysts doubt that Intel's inroads into smartphones and tablets will have a meaningful impact on earnings.

"We would look for any updates on this front, particularly prospects of any further customer prospects as Motorola and Lenovo are unlikely to have sufficient scale to drive meaningful upside in the space," said Bernstein analyst Stacy Rasgon.

This is Intel's first attempt at breaking into the smartphone space--its chips have been criticized in the past for being battery hogs, so they haven't been included in mobile devices. ARM Holdings (ARMH) chips, licensed by Intel competitors including Qualcomm (QCOM), have historically controlled the smartphone and tablet sector.

"We believe Intel is at a disadvantage to ARM-based chips in three key metrics of mobile computing: power, cost and software," wrote Christopher Danely, an analyst with JP Morgan.

And while analysts are generally upbeat on Ultrabooks using Intel chips, pricing remains a concern.

"We believe Ultrabooks will be well received by consumers looking at the non-Mac PC market, but believe price points remain a wild card," Raymond James analyst Hans Mosesmann wrote in a note to clients. "This will be key trend worth monitoring for Intel over the next few quarters."

The majority of Ultrabooks cost over $900, though Intel says it's working to bring prices down.

Intel's attempt at moving outside its core PC business comes at a crucial time for the company.

A shift in consumer's habits towards tablets like Apple's iPad has impacted the sale of PCs, as have macroeconomic factors like last year's Thai flooding disaster which affected the supply of hard disk drives.

Analysts expect Intel to report earnings of 61 cents a share on revenue of $13.7 billion.

Featured Videos