Amidst reports chip-making giant Intel (NASDAQ: INTC) is out-of-step with a computing world shifting to mobile devices, its Haswell family of fourth-generation Core processors arrives. The new chips not only ensure a brighter future for Intel, but may redefine the future of PC computing.
What does Intel's Haswell processor do for PCs ?
Intel's low-power Haswell chip operates with a scenario design power (SDP) as low as 4.5 watts, which offers the following benefits in a PC environment:
- Fanless 2-in-1 computing devices, which will deliver "the best of a notebook and a tablet in amazing new form factors."
- The first fanless 2-in-1 and tablet designs based on core processors.
- Thinner and lighter devices across a range of form factors.
Fanless tablets that are as thin and light as the iPad, but with PC-like performance, could revolutionize the entire 10" tablet ecosystem over the next year.
What Haswell does for Intel?
Haswell might drive a PC renaissance, putting Intel back in front. Devices that fit better, weigh less, use less power, and run longer on battery make PCs more attractive for business and the general public, delivering most of the advantages gained by switching to mobile devices.
Darren Yates of APCmag says:
Reducing the desktop computer to little more than a stack of half-a-dozen CD cases in size while at the same time reducing power consumption is where Intel expects the consumer and enterprise desktop to end up.
Reduced power consumption computing (RPCC) is a key issue today across a range of devices. The focus is thermal design power (TDP) and related battery life. This is where the PC as a platform is headed for the next few years, and Intel seems to be taking it there with Haswell.
The Wintel alliance - Microsoft's (NASDAQ: MSFT) Windows operating system and Intel's CPU technology - dominated IT for so long, but the duo haven't been "as happy as they start coming down the other side."
If Haswell makes good on the promise of Windows 8, while capitalizing on the synergy between the brands, all that could change. Major PC-makers are taking advantage:
Lenovo's newest ThinkPad is Haswell-powered and comes with Windows 8 OS. [cnet]
Intel's technical star rises again with Haswell. Redefining the PC landscape, while blurring the line between bigger and smaller devices, Intel is not so much behind the pack but out in front again. Even Apple (NASDAQ: AAPL) wants an ultra-high performance version of Haswell for Apple's upcoming MacBook Pros with "as much GPU power as possible."
What could go wrong for Intel?
Haswell could fail to deliver on its great promise:
- The chips don't perform as advertised, or aren't worth the upgrade.
- Buyers decide to wait for fifth-generation chips.
- The world shifts to mobile even faster than expected.
- Intel alienates customers by taking "its disregard for desktop customers to new levels of indifference, maybe even spite." [Laird]
Or competition beats Intel to the punch. One version of the Samsung Galaxy S4, the Galaxy Note III, and Windows RT 8.1 devices will all rely on AMD's Snapdragon 800 family of "nippy" processors.
Who can predict the future? All this might happen and more. Intel's massive dominance in the chip field, and huge capital investment in tomorrow, could also run the board.
Intel fundamentals are strong
Intel cash flow has held steady despite the shift away from PCs. Intel is the top chipmaker in the world, bigger than No. 2 Samsung and No. 3 Texas Instruments (NASDAQ: TXN) combined. ARM Holdings (NASDAQ: ARMH) famously dominates the mobile market, but pundits believe Intel will catch up on mobile chip design.
$13 billion in 2013 capital expenditures means it's investing in itself big-time. Weak stock price sends yield up impressively: a forward PE of below 11 and yield above 4% makes for strong value in the tech world.
Intel has a history of positive surprises: its technical breakthroughs will not only save it, but redefine our computing future.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.