Tablets, data centers, wearables and more are Intel’s Next Big Thing.
In fact new technologies is where Intel intends to place more emphasis as it seeks to capture new sources of revenue and reduce its reliance on a mature PC market.
The company is laying the foundation to be the powerful core that enables new devices and technology to take computing to a new level of user experience.
Intel’s goal for 2014 is to ship 40 million chips for tablets, said CEO Brian Krzanich during this week’s fourth quarter and year-end call with financial analysts. Krzanich is optimistic the company can reach that figure, especially with Android-based tablets coming to market in the second quarter based on the Bay Trail chipset.
The forthcoming tablets are designed for the Atom segment and upper-end of the tablet market, Krzanich said during the earnings call. The company will also determine the Bill of Materials cost at the system level for what low- to mid-range tablets will need.
Intel is no different from any other tech titan looking for the Next Big Thing. Its own partners like Dell, HP and others seek new revenue sources to move away from the low margin PC hardware business and have focused on software and services too.
But this transition also illustrates the difficulties for traditional PC giants to move quickly and generate revenue from new market areas. While PCs will never go away despite reports of the death of the PC by naysayers, the market will transform and rely on mobile technologies like tablets and smart phones as strong alternatives for enterprise and consumer applications.
Regardless of where Intel’s NBT might be, the $53 billion company is still at the heart of the PC business and must continue work in this area as well. Financial results from Intel’s PC Client Group reflect the overall PC industry growth or decline.
Intel posted fourth quarter and end of year results this week. For the 4Q13, Intel posted revenue of $13.8 billion and net income of $2.6 billion, up 3% in revenue and 6% in net income respectively a year ago.
Intel also reported year-end revenue of $52.7 billion and net income of $9.6 billion. The results represented a loss of 1% in revenue from last year’s results of $53.3 billion and 13% drop in net income of $11 billion a year ago.
The big winner for the year-end revenue was Intel’s Data Center group, which reported year-end revenue of $11.2 billion, up 7 percent from 2012. The PC Client Group revenue was down 4 percent from a year ago, posting $33 billion. Other Intel architecture segments dropped 7 percent from 2012 with $4.1 billion in revenue.