Competition grows in the PC market
Previously, we saw that strong demand in the commercial and gaming PC segments is driving computing sales of Intel (INTC) and Advanced Micro Devices (AMD). Intel is a leader in the PC CPU (central processing unit) market with over a 75% share, but competition is picking up.
In 2019, AMD plans to launch its 7-nm (nanometer) Ryzen CPUs, which would have a process node advantage over Intel’s 14-nm CPUs. While AMD may not have the most advanced high-performance CPUs, it plans to compete with Intel by offering better performance at a lower price.
Qualcomm has also rolled out its ARM-based PC SoCs (system-on-chips), which are facing issues delivering high-end performance but are ahead in offering long battery life and the instant wake feature. A Bloomberg report in April stated that Apple (AAPL) plans to ditch Intel’s CPUs for its own ARM-based processors for their Macbooks by 2020. Apple only accounts for 5% of Intel’s sales as per Bloomberg estimates.
If we look at the competitors individually, they do not pose a threat to Intel, which has a broad CPU lineup and technical expertise. However, the competition collectively poses a threat to Intel’s PC CPU sales in 2019 and beyond, as each competitor is targeting the notebook segment, where demand is still growing.
Intel’s PC strategy
Intel looks to address the competition by leveraging its strength, which is high-performance. It’s expanding its offerings in growing segments where high-performance matters the most, which is the commercial, gaming, and two-in-one laptop segments. A Market Research Future report expects the two-in-one laptop market to grow at a compound annual rate of 17.4% to ~$5.4 billion from 2016 to 2022.
Intel has introduced its eighth generation Core processors for ultra-portable laptops and the Intel Core i9-9900K processor for gaming laptops. The company is segmenting its products to command a higher price. The company is also expanding its PC TAM (total addressable market) to cater to new markets.
Next, we’ll look at Intel’s expanded PC roadmap and rumors surrounding upcoming CPUs.
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