By Ryan Cole
The computer isn’t dead yet.
- True, tablets are primed to be the fastest-growing market in the tech world for the next few years.
- True, tablets are stealing some computer users – 21 million will replace a computer with a tablet in 2011, according to Goldman Sachs.
- And true, tablets are growing at an insane pace -Apple’s iPad has the potential to pass its Mac division in sales this year – with the overall market moving about 60 million units this year, worth around $35 billion.
All very impressive numbers – especially for such a new market. But the computer is still going strong…
Intel’s Record-Breaking Quarter Beats Predictions
The market for traditional computers is better than it’s ever been… as seen with Intel’s (Nasdaq: INTC) latest record-breaking quarter. By bringing in $12.8 billion, Intel blew away analyst predictions and beat last year’s sales by 25 percent. Despite a number of challenges that some thought would bring bad news from the computing giant.
- A January snafu at a microchip plant resulted in a defect that, according to the company, cost $1 billion to correct.
- Demand softened in America and Western Europe at the start of the year.
- Demand in Japan fell through the floor after its giant earthquake, which also resulted in production delays across the computer industry, if not Intel directly.
None of that mattered. Business buying was brisk, and with the number of computers sold in 2011 expected to hit 370 million, Intel should have another great quarter coming right up.
But will it last, though?
The Fastest Growing Tech Segments Breathe Down INTC’s Neck
There’s no doubt that more and more consumers are getting more and more content from tablets and smartphones. And, while both form factors aren’t great for creating content, that’s changing.
And that’s a problem for Intel.
The chipmaker rules the PC market, with Intel chips inside nearly 100% of all computers. The same, however, isn’t true of portable devices.
Apple designs its own chips for the iPhone and iPad. ARM designs just about every other chip found in smartphones and tablets.
Intel has a microprocessor division that makes energy-sipping chips for tablets and smartphones, but it’s late to the game and, for the moment, outclassed by its competitors.
Intel’s PC Market Losing Footing to Tablets and Smartphones
Computers aren’t going away any time soon – but they might become more niche-oriented, only necessary for creative users, as opposed to consumers. As Apple CEO Steve Jobs envisions it, the full computer may become the truck of the tech industry – with tablets, smartphones and other devices filling the role of cars.
As that vision of the future comes closer to reality, Intel needs to gain a better foothold in the portable processor race. Without that, it may see its market shrink from under it.
There are no challenges within the realm of computers. But if computers themselves are challenged over the coming years, Intel had best have a viable position in other markets.
The company certainly has the resources and the know-how to become a major player. But the time is now. Intel can’t rest on its laurels as its best quarter comes to a close – it needs to prepare for the next battle.
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