27 Aug

Will Intel Continue to Lead in Personal Computing, Server Market?

WRITTEN BY Puja Tayal

How tablets have changed things for Intel

Intel (INTC) was the number-one player in the semiconductor market between 1991 and 2001, thanks to its lion’s share of the PC (personal computing) space. As seen in the previous part of the series, PCCG (PC Client Group) accounted for more than 60% of the firm’s total revenue in 2014.

Today, over 80% of personal computers sold worldwide have Intel processors. For example, Apple (AAPL) uses Intel’s Xeon processors in their notebooks and laptops. However, a slowdown in the PC market that began in 2012 has had a direct impact on PCCG sales. It has forced the company to diversify into other promising segments of consumer electronics.

Will Intel Continue to Lead in Personal Computing, Server Market?

Trend in PC sales

According to the International Data Corporation, total PC sales fell steeply between 2012 and 2013, from 350.4 million units to 315.1 million units, due to high demand for tablets. PC sales continued to fall in 2014, although at a slower rate, with 308.1 million units sold. This downward trend is likely to continue, with 289 million units expected to be sold in 2015. Given this slowdown, Intel expects its fiscal 2015 revenue to fall by ~1%.

Intel’s move to server market

To offset the decline in the PC segment, Intel is rapidly shifting its focus toward the server market. In the previous part of this series, we learned that 26% of the company’s 2014 revenue came from the DCG (Data Center Group). The company has a 99% share of the server market.

However, ARM Holdings (ARMH) is slowly gaining traction in this segment and aims to compete with Intel by selling its server chips for less. Intel will also face competition from Avago (AVGO), which recently acquired Broadcom (BRCM) in a bid to expand into the data center space.

Intel makes up 7.74% of the iShares PHLX Semiconductor ETF (SOXX).

Latest articles

Goldman Sachs (GS) settled a lawsuit that alleged it rigged bond prices. Also, Deutsche Bank agreed to pay a fine of $15 million to settle a lawsuit.

In the November 15 premarket trading session, Amarin Corporation (AMRN) stock rose more than 7%, caused by the FDA positive decision for Vascepa.

In the November 14 trading session, Aurora Cannabis (ACB) stock fell 12.7% from the previous session during after-hours trading.

Strategy Analytics reported that Apple could lead the 5G smartphone market in 2020, outshining Samsung—the current leader in the global 5G market.

This week has been tough for the cannabis sector. Cronos Group and Canopy Growth reported lower-than-expected earnings, and the sector ETFs dropped.

Yesterday, Argus Research upgraded Uber stock from “hold” to “buy.” Let's look at Uber and Lyft’s recent analyst rating changes.