Intel Corp (INTC)

[VeeCee]

Sep 16, 2013
11:06 PM
Intel: Strategy Takes Shape, Says Stifel; Prepared to ‘Blanket’ Computing Market
By Tiernan Ray

Following last week’s annual developer conference by Intel (INTC) in San Francisco, at which CEO Brian Krzanich outlined a more aggressive push into mobile computing processor development, and the company sounded upbeat about converged tablet-PC devices, Stifel Nicolaus’s Kevin Cassidy today reiterated a Buy recommendation on the stock, and a $28 price target, writing that the company’s “long term strategy” is “taking shape,” and that “Following Intel’s 16th annual Intel Developer Forum, we see the company has made advances in its data center product line up and in driving a convergence of the low end notebook / high end tablet product categories.”

“In summary, we see this year’s IDF as clearly supporting our INTC Buy recommendation as the company uses its manufacturing process advantage to defend its server and PC market share while gaining share in tablets and mobile.”

Intel, he writes, has not only “changed its fundamental transistor design toward power efficiency,” something of primary importance for mobile computing, it has also created a diverse set of products out of a single “platform,” which will enable it to “blanket the computing market” with chips for everything from wearables to supercomputers, he thinks.

The current Atom mobile chips, dubbed “Bay Trail“, already give the company a position in tablets and ultra mobile computing, while the announcement of a really low-power “Quark” chip, forthcoming, is intriguing:

For the client side, Intel announced its 22nm Bay Trail SoC based on a new architecture. These 64-bit devices are targeted ~$100 tablets to ~$500 2-in-1 (tablet mode/clamshell PC mode) products. Android, Windows 8, Chrome, Linux, MacOS all run on Bay Trail. Third party lab test show Bay Trail-based devices having higher performance at similar battery life. We view Bay Trail as putting Intel firmly into the tablet/low end PC market and may slow the erosion of this portion of its revenue. Intel announced its next generation of CPUs, Quark. Being 1/5th the size of Atom and 1/10th power consumption, Quark is targeted at a broad range of ‘Internet of Things’ applications. Quark may become interesting over time.

Intel’s tone, moreover, was less futuristic last week, he thinks, more here and now:

Importantly, in our view, IDF13 presentations and announcements were focused on products available now to only 6 months from now. Typically, Intel announces 2-3 year product roadmaps at IDF. We find this refreshing and demonstrating management’s confidence in its product portfolio.

Intel shares today closed down 5 cents at $23.39.
http://blogs.barrons.com/techtraderdaily/2013/09/16/intel-strategy-takes-shape-says-stifel-prepared-to-blanket-computing-market/