Analysis: What Intel, AMD Are Saying About The PC Market


Intel and AMD reported their fourth-quarter and full-year financials within days of each other, and both companies cited weak PC demand.

What do they expect for 2013? Intel and AMD executives each had slightly different perspectives on the PC market, but there were some telling comments made during their respective earnings calls.

As far as weak PC demand, Intel CEO Paul Otellini made a couple of remarks that tied slumping PC sales to a weak world economy. "This was in an environment of relatively soft PC demand and weak macro-economic conditions," said Otellini during the company's fourth-quarter earnings call.

Intel CFO Stacy Smith echoed that sentiment. "Worldwide GDP growth was significantly less than we had thought entering the year and the PC market segment was impacted by the growth of tablets," Smith said.

 

[Related: Windows Growth Solid For Microsoft, But 4Q Profits Fall]

Tablets were a topic of conversation on Intel's earnings call as well. Otellini talked about 2012 being a period of "significant transitions" for the PC market but remained upbeat overall about the potential impact of tablets going forward.

"PC manufacturers are embracing innovation as we are in the midst of a radical transformation of the computing experience with the blurring of form factors and the adoption of new interfaces," he said. "It's no longer necessary to choose between a PC and tablet. Convertibles and detachables, combined with Windows 8 and touch, provide a two-for-one, no-compromise computing experience."

Otellini also said performance requirements for new tablets are going to be in the same range as those of recent PCs. "As we look forward, it's very difficult to distinguish between a detachable clamshell notebook and a tablet. The form factors are going to blur here," he said.

As for the company's outlook on PCs, Smith said Intel, Santa Clara, Calif., has "pretty modest expectations around units" for the PC Client Group. However, he said he expects that modest growth to come from "devices that sit in the middle" such as convertible notebooks and tablets rather than desktops and traditional laptops.

With the recent news that Intel will cease its motherboard manufacturing operations by 2016, it's clear Intel sees the desktop PC as not just a shrinking business but as an endangered species going forward.

NEXT: AMD's Outlook For The PC Market