As Intel continues to suffer from the steepest PC decline in history, its new CEO sees a bright spot on the horizon in the form of cheap tablets and convertibles.
The firm reported a 29% drop in second-quarter profit to $US2 billion and slashed its outlook as consumers put off buying PCs and laptops.
CEO Brian Krzanich admitted that the firm had been slow to jump on the smartphone and tablet bandwagon, but that the "ultra-mobile" market was now the firm’s top priority.
"Intel was slow to respond to the ultra-mobile PC trend," he said. "The traditional PC market segment is down from our expectations at the beginning of the year. The ultra-mobile devices such as tablets are up."
But he pointed to Intel’s upcoming Bay Trail architecture, due later this year, which means consumers will see a flood of cheaper, convertible tablets – some costing less than $200.
“We believe what it really does is it allows us to get into markets that we’re not in, in a big way today," he said.
Krzanich said convertibles could sell for less than $US400, while touchscreen laptops could go for $US300. He also forecast a drop in Windows 8 and Android tablet prices by Christmas.
"Some you’re going to see even lower below $US150 as we go through the holiday season," he said.
Intel has previously said tablets based on Bay Trail would arrive before Christmas, with the new chips doubling the CPU performance of current devices. This, it said, will allow OEMs to make tablets as thin as 8mm with true all-day battery life.
Devices that cost less and have better battery life should, according to CFO Stacy Smith, boost Intel’s position in mobile.
"With Bay Trail coming to the marketplace, we’re going to be hitting price points in the touch-enabled segment of the PC market that we’ve never touched before and we’ll be able to do that profitably, and we’ll start hitting share in tablets," she told investors.
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