Tablet computers may be all the rage with the introduction of Apple’s iPad, but they will not have a big impact on the PC industry, according to Intel.
“Everybody says tablets are going to eat the notebooks’ and netbooks’ lunch,” Paul Otellini, chief executive, told the leading chipmaker’s investor meeting on Tuesday. “On the scale of the PC industry, they’re relatively insignificant.”
Intel’s Atom chips dominate the netbook category, but it faces stiff competition from Arm-based processors in tablets, and some industry observers see tablets chipping away at netbooks’ market share.
“My personal belief is that tablets like netbooks are additive, ” Mr Otellini told analysts.
“They’re a new usage model, they’re good for computing, they’re probably good for Intel long term and I don’t think they will take market share away from other devices – you do different things with a tablet than you do with a notebook or a desktop or even a netbook for that matter. A tablet is fundamentally a consumption device.”
The chief executive showed a chart (pictured) intended to demonstrate that Intel’s core PC business was not becoming a victim of weak growth in computer sales.
“I think the whole notion of the PC market being slow growth and dead, as has been voiced a number of times over the past decade, is really quite wrong. The PC has turned out to be remarkably resilient as it gets reinvented every year,” he said.
While desktop PCs are only expected to have a compound annual growth rate (CAGR) of 2.4 per cent between 2010 and 2014, notebooks will have a 22 per cent CAGR, netbooks 15 per cent and tablets 73 to 88 per cent, according to analyst forecasts gathered by Intel.
This all adds up to around 700m PCs being sold in 2014, but tablets only accounting for 50-60m units, taking the high end of forecasts, Mr Otellini said.
The total CAGR for computers over the period is a healthy 15 – 16 per cent.
This translates to the PC business helping Intel to double-digit growth. The chief executive said the company was on course for revenue and earnings per share growth in the low double-digits over the next few years.
Intel expects Atom chips to figure in tablets running Windows 7′s Premium version, the next version of Android codenamed Froyo and Intel’s own MeeGo operating system. However, adapting MeeGo for touchscreens means it is not expected to be available in a final version until the third quarter.
Despite focusing on semiconductors in his speech, Mr Otellini said Intel should no longer be considered a chip company as it had expanded into platforms, software and services.
“We’re transforming ourselves into a computing company, don’t think of us as a chip company anymore,” he said.
