Intel (NASDAQ:INTC) stock has repeatedly upset investors, but the top chipmaker's relationship with smartphones and tablets may help it recover.
The future of computing is still vague, but it definitely involves sleek smartphones and tablets. Gone are the days when bulky desktop PCs dominated consumer electronics. This reality may have hit Intel hard along with its other rivals. The leading chip manufacturer in the world seems to have made a huge number of investors jittery about its forthcoming moves.
Intel Q3 Earnings
Intel publicized its third quarter earnings for the fiscal year and overall, it was not entirely bad. Admittedly, there were a few problems here and there, but the fact remains that Intel did beat the earnings expectations when it comes to their revenues and profits. The overall revenues actually increased 5 percent in this quarter, which is owed to its data center that continually produces healthy profits. The launch of laptops and portable devices with Haswell also helped the total revenue grow.
Intel is still considered the top semiconductor manufacturer in the world. It is only right that it is the leading earner in the PC industry. However, the problem for Intel right now is that its top competitors, Samsung Electronics Co. Ltd (OTC:SSNLF) and ARM Holdings PLC (NASDAQ:ARMH) have eclipsed the mentioned company.
Samsung, the electronics giant from South Korea, has a market cap of $189.77 billion, earnings per share ratio of $207,966.43, and a recurrent increase in sales and income. Despite all that, Samsung still received a downgrade from Credit Suisse Group AG (NYSE:CS). The downgrade resulted to Samsung's fall of about 7.5%. In addition, the company still faces a major battle against Apple (NASDAQ:AAPL) regarding smartphone patents. As for ARM Holdings PLC, this was once considered an attractive stock. Nevertheless, compared to Samsung, this company received an outperform rating from Credit Suisse. Although this is much better than a neutral rating, it is still not as good as a buy rating. ARM Holdings PLC has lower shares volume than its average.
Quite evidently, Intel and its competitors are experiencing a few difficulties. Still, Intel is up from the previous quarter with a net income of 58 cents for every share. This is actually an increase of 49% from the last quarter, Brian Krzanich, the CEO of Intel, stated that the company has experienced a modest growth even though the environment is quite tough. The company is executing its own strategies in order to offer their customers a much broader product portfolio.
Since August this year, they have launched more than 40 products for different market segments. However, their main focus right now is on hybrid laptop/tablet devices and ultra-mobile systems.
Broadwell for 2014
Consumers who may have been excited for the next generation Macs and PCs may have to wait a while longer. Intel's CEO announced before that the Broadwell chop will be shipped by the end of 2013. However, quite recently, the production of the processors have been delayed due to defect density problems. The chips may finish its production by the first quarter of 2014, but the PCs that will use the chips will not even make their appearance until the second half of next year. The announcement was made during Intel's Q3 earnings call where the manufacturer explained the issue but did not provide a specific launch date.
Broadwell will be the first ever 14 nanometer product to exist in the world of computers. As the consumers wait for this chip, Intel's other product Galileo is already available as pre-orders at Mouser Electronics Inc. Galileo by Intel is Arduino shields compatible, allowing Arduino to extend its capabilities. Of course, this new development board from Intel expands beyond the Arduino ecosystem.
Intel remains to be an interesting stock. There may be a few hurdles, but Intel is still a world-recognized brand. For the investors, it is not yet time to give up on Intel as its data center is growing strongly and is expected to be even more robust for the 4th quarter. Once the Haswell systems are released, sales may reach higher points.
With Intel offering better quality systems for the consumers and its developing link to tablets, Intel stock may just provide an unexpected treat for the investors.
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.