14 DAY TRIAL // Apparently, Intel's stock price dropped a bit yesterday, about 18 cents to reach $29.08, even though many supporters still expressed support for a still powerful Intel at Citigroup’s conference where the company's Kirk Skaugen was present.
As we already pointed out, Intel made a "tour de force" during that conference, announcing over 800 new Skylake products coming soon and saying that it is investing greatly in the gaming industry, planning even to support the creation of the world’s first gaming stadium in China, which could hold 40,000 to 50,000 people, while other 65 million people could watch gaming marathons on Twitch following Intel Extreme Master.
However, we also mentioned that, while Intel plans to fully tap into the PC industry, they are also capped, since every push they attempt to make into the mobile industry is outplayed by other major players like Qualcomm and Apple, leaving Intel to dominate only the more expensive 2-in-1 market, which still has a lot to grow.
Nonetheless, according to Barrons.com, Citigroup’s Christopher Danely sees a growth in PC demand, which may lead to some stability in the field and inflate Intel’s domination on the PC market, as the company is already at the top of their game in that segment and is investing big funds in co-developing the 3D Xpoint memory technology that could displace classical NAND flash memory chips into history books.
Intel works hard to impress, but it still lags behind in the mobile market
The aforementioned source quotes Robert Maire of Semiconductor Advisors as heralding the end of mobile sales domination, claiming that “All of a sudden, exposure to those same markets is a bad thing as consumers, particularly in those markets, are now pulling back their spending sharply, and handsets sales are down. In a perverse turn, Intel now looks good because it doesn’t have much to lose in those markets as compared to many others who rode the rocket up but can’t eject as it returns to earth.”
While it’s true that the recent Skylake launch in August boosted PC sales a bit, China’s Apple fetish won’t end in the near future, and since the Cupertino giant has just launched the new iPhone 6S and iPad Pro, it’s unlikely that mobiles sales will dip anytime soon. Especially considering that a few days after the new devices were launched, its stock price grew by 1.64%, closing this past Friday at about $114.21 after opening at $112.
In other words, Intel won’t banish Apple from China anytime soon. PC sales are growing indeed, but at a much slower pace than mobiles, and all Intel has to do is wait until its Skylake caps the market, probably in a couple of months.
Maybe Intel’s new Atom could steal some clients from Qualcomm, but since the latter is already developing the new Snapdragon 820, and has recently signed a new contract with Samsung to develop its wafers for the next processor, it’s unlikely Qualcomm's traditional clients will suddenly choose Intel with its new and untested device.
This is why Intel needs to negotiate better deals with up-and-coming companies that have the potential to grab a big market share with some incredible devices, rather than just remain in the niche and quite expensive 2-in-1 market segment.