But when you consider that part of that was driven by anticipation for Windows 8, and part of it was driven by an overall poor global economy, you'd think that tablets would have done a lot more damage.
Revenue fell off a rather abrupt cliff. How much do you think is Windows-8 Osborning vs. weak macro vs. tablet?
In Q4, we have Windows-8 devices selling, yet Intel has guided an extraordinarily weak Q4. Intel has declined to give 2013 guidance. How long will the Win-8 ramp take and how many sales will this cost? Did Intel know about the Win-8 anticipation effect? If so, did they not bake it into guidance back in Q1/Q2?
In a weak macro environment, smartphones, tablets and datacenter have grown very quickly. It's not like we are in a global recession... there's still a mediocre GDP growth rate with unemployment in the US gradually coming down along with a floor in the housing market.
Mature western markets have been primarily driven by replacement/upgrade sales. Very few people in that market are getting their "first" computer. Most of the unit growth of the past several years has been driven by emerging market demand as people over there become rich enough to buy their first computers. Overall unit growth over the past several years has been in the single digits. The recent outsized EPS growth at Intel has come from a very successful ASP uplift when Intel introduced the i3/i5/i7 branding as it was easier to upsell.
These are my views on the PC client market. Feel free to correct me where I am wrong. I'm sure you will :)
I think you know how I'm thinking about future demand. I think ARM based computers have to potential to disrupt Intel's ASPs in the best case and even take significant share in the worst case. The mere existence of that risk factor will keep a lid on earnings expectations. I think these views are consistent with the depressed earnings multiple on the stock.
Uh... no. Tablet as a form factor is here to stay. Dreams of tablets fully replacing the PC, however, is a fad.
A tablet sale in-lieu of a laptop upgrade is still a lost opportunity. Tablets are effectively elongating the upgrade cycle. We'll see how the market reacts to Intel's Win8 hybrid products and if they can arrest the ARM-based tablet incursions.
Are you buying INTC shares at these levels? At what price would you consider selling your shares?
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