- Digitimes' tablet OEM sources report Intel (INTC +0.3%) plans to launch "entry-level" Bay Trail Atom tablet CPUs in Q2 2014 expected to sell for just $15-$20. Current Bay Trail parts (just launched) go for $32 and $37, prior to a 10% volume discount.
- The entry-level CPUs would be more cost-competitive with standalone ARM-based app processors from Qualcomm (QCOM +1%), Nvidia (NVDA +0.1%), and MediaTek, many of which go for $15-$20. If the report pans out, it suggests Intel is willing to further sacrifice ASPs and margins to grab mobile CPU share; as it is, current Bay Trail CPUs have spawned concerns about the cannibalization of Haswell notebook CPUs.
- Digitimes previously reported Intel plans to launch several new mobile CPU lines in 2014/2015, including Bay Trail successors codenamed Cherry Trail (Q314) and Willow Trail (Q414 - that ETA seems aggressive).
- Meanwhile, sell-side expectations for today's Q3 report are muted. Macquarie, which cut shares to Neutral last week, is concerned about PC weakness, inventory destocking, and "limited near-term gains" from "new initiatives" (i.e. mobile). Cowen says an Asia trip pointed to "low demand visibility" and customer unwillingness to "stock a lot of new inventory."
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Wells Fargo is more positive, citing improving monthly sales data from Taiwanese contract manufacturers.