Intel Sees PCs Stabilize, but Mobile Business Still an Issue
The Data Center Group, which officials had said had underperformed in some areas last year, saw revenue gains of 11 percent, hitting $3.1 billion, due in part by the vendor's ability to sell chips into servers used in cloud and hyperscale environments. Officials earlier this year said they expected the data center business to rebound this year as the global economy improved and organizations began embracing Intel's Xeon server chip portfolio, which was refreshed in 2013 and earlier this year. However, it's the mobile chip space—dominated by systems-on-a-chip (SoCs) designed by ARM and made by various manufacturing partners, including Qualcomm, the top mobile chip maker—that Intel has been focusing much of its efforts in over the past several years. The company has been improving the performance of its chips while driving down their power consumption in hopes of challenging ARM in the all-important market. The company's processors support not only Windows, but also Google's Android and Chrome operating systems, and this year Intel is on track to launch 14-nanometer mobile chips, like the Atom "Braswell" SoC for PCs and convertible systems, and "Cherry Trail" for tablets. Both will succeed current 22nm "Bay Trail" chips. "Intel must pick up the pace for its tablet sales to successfully achieve this goal and its next Atom chip, Cherry Trail, which will succeed the firm's Bay Trail chip when it becomes available in 2H14, will be a critical part of this strategy," Stephen Belanger, an analyst with Technology Business Research, said in a research note. "Cherry Trail will be used in tablets and low-end PCs, and the chip's 14 nm manufacturing process will provide faster processing and improved battery life than the 22 nm Bay Trail chip. … The release of Cherry Trail will not make Bay Trail obsolete, as Intel will leverage both chips to cover all spectrums of the tablet market. Cherry Trail will be marketed in high-end devices and Bay Trail delivered in the low-end."
Intel also is looking to expand its cellular chip portfolio, as it looks to grow sales of its new XMM 7260 4G Long-Term Evolution (LTE) platform—which the company unveiled at the Mobile World Congress 2014 show in February—while drawing down its inventory of 3G chips.