Replies to post #120991 on Intel Corp (INTC)

[mas]

Netbooks and Surface Pro.

[mas]

The next question comes from Stacy Rasgon from Sanford Bernstein.

Stacy Rasgon - Sanford Bernstein

Hi, guys. Thanks for taking my question. First on the annual revenue guidance. Your prior guidance had total revenues up in the low single digits as well as total units up in the low single digits. With the new guidance of relatively flat revenue, does that essentially imply flat total units? And if so, how important is the Bay Trail launch and Bay Trail volumes to actually achieving that type of a unit target?

Stacy J. Smith - EVP and CFO

Apology, Stacy, let me restate your question to make sure I'm answering because that was a little garbled in the middle and it's not your fault. We're just having some issues on our part. I think what you're asking me is kind of defend my flat revenue forecast and give you a sense of what's going on in client versus other segments of the business and in particular what's going on with units? Is that where you were going?

Stacy Rasgon - Sanford Bernstein

Yeah, that's it. And if the guidance does actually imply flat units correlated with your revenue, how important is gaining Bay Trail volume in the back half to achieving that type of a unit outlook?

Stacy J. Smith - EVP and CFO

Yeah, okay. Let me go there. So first I'd say we would actually expect that overall computer units, so tablets up to PCs will be down from this year. And that's consistent with a flat revenue forecast for the company, so let me just kind of walk you through them and I'll just start with what you've seen from Gartner and IDC is their view of the year. We're pretty aligned with those numbers in terms of our view of the classic PC market. But to get to then our units you have to make some adjustments to that. So first off, in their class view of PCs that will not include some of the ultra-mobile devices, i.e. the Microsoft Surface Pro. So you'd add that in to get to our PC Client group units. We think we're gaining some share in tablets, so that's a little bit of an offset. Netbooks for us is declining pretty significantly. That's not in the PC Client groups segment. That's in the other IAG segment. And then as I said earlier in my prepared remarks, we think we're gaining some share so that also gives us a little bit of help. But when you net all that out, you'd say our units and our revenue for the PC Client group is down over year-over-year. It's just not down as much as the headline number that you see from Gartner.

So you start there. And then the offset to that the places where we're growing is data center group which we think grows in the low double digits. If you do – manage your ramp on that it's 20% of our revenue. So that adds a couple of points of growth to the company. NAND is probably worth a point on its own is they look to be having a good year. Some other smaller things but you kind of net that out against the PC Client group that's down a bit and you get to flat for the year. So just kind of a rough map on viewing the different segments. Does that answer your question?

http://seekingalpha.com/article/1554402-intel-s-ceo-discusses-q2-2013-results-earnings-call-transcript

[chipguy]

Probably came out of AMD's hide, yet again.

When the PC market is healthy AMD usually ships a fair number
of units at low ASP. Since the downturn Intel's unit sales have
consistently dropped at about half the rate of total PC sales or
less. In contrast AMD took a disproportionately higher hit.

Remember, over the course of last year AMD unit sales dropped
by about a third in all three major x86 segments (desktop, laptop,
and server).

[sanket1]

What is the discrepancy here? Are netbooks distorting the numbers?

11% PC declining is mostly coming at AMD's expense.

How do netbooks distort the numbers. Any rise or decline in netbook sales will consistently affect overall 11% decline and Intel's 5% decline numbers.

[DavidA2]

Stacy said it was ultramobile devices like Surface Pro. That device itself might seem insignificant, but combined with other like devices, it may be enough to explain the difference.

Also, I have problem with Gartner and IDC reporting their numbers. They seem to fudge it a bit to look worse than it actually is.