Intel (INTC) said in its first quarter earnings call that its tablet business is doubling every quarter, with first quarter semiconductor shipments to tablet makers twice as high as the volumes from fourth quarter, and second quarter shipments expected to be double first quarter volume. The company said its smartphone business is growing, and that it is on track to ship multimode voice and date LTE baseband solutions by the end of the year. Intel did not share specifics about volumes of semiconductor shipments to smartphone makers, as its chips for smartphones are not yet a significant contributor to overall revenue.
Revenue for the fourth quarter was $12.6 billion, off 2% from the year-ago quarter. Net income was $2 billion ($0.40/share), down 26% from $2.7 billion ($0.53/share) for the same period last year. Analysts had expected lower numbers from Intel, as the market for personal computers continues to stagnate.
While chips for mobile devices are not yet a big part of Intel’s revenue, they are a big part of spending. “Roughly half our spending now is on system-on-chip,” said Intel, saying that its “microprocessor world” includes phones, tablets and embedded chips for industrial and automotive customers.
Intel CEO Paul Otellini reflected on his 39 year career at Intel during his last earnings call. He said that he came to Intel in 1974 when the company was still a “startup” with $134 million in revenues. Otellini has announced his retirement, and Intel’s director of investor relations said that the company hopes to name his successor at the May shareholders’ meeting.
Some have speculated that a new Intel CEO could pave the way for Intel to work with its archrival ARM, the leading architect of chips for mobile devices. During yesterday’s earnings call, one analyst asked the company about the possibility of making ARM a customers for its foundry business. The reply was a flat “no” with the explanation that one of the ground rules for Intel’s foundry business is not to “enable a chip competitor.”
Intel said its Bay Trail chipset will launch during the second half of 2013. During the call Otellini focused on Windows 8, and on the opportunities presented for Intel’s Bay Trail chipset by smaller form factors for notebook computers. Otellini said he sees “reinventions going on broadly across notebooks” and that the upcoming “thin and light touch-enabled notebooks,” will be priced as low as $300 to $400. Otellini acknowledged the “adoption curve” associated with Windows 8, saying that it is more significant than the transition Windows users had to make when moving to Windows 7. But he also said the transition is worth the effort, noting that he has recently transitioned to Windows 8 on his personal devices.
Otellini also said that Intel has shipped its 100 millionth chip produced using its 22 nanometer process, and is on track to ship 14 nanometer chips in the “back half of this year.”
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