5 Questions Partners Want Intel To Answer On Its Q4 2016 Earnings Call

Intel Earnings: Everything You Need To Know

Partners want to hear more about how Intel performed during its fourth quarter of 2016 – and the year overall. The Santa Clara, Calif.-based company, scheduled to hold a conference call to discuss its most resent financial results on Jan. 26 after the market closes, is still dealing with a restructuring effort that began in April and has undergone massive executive switch-ups -- including bringing former ARM executive Tom Lantzsch on board as vice president of its IoT group.

Partners also look to Intel's earnings as an indication for how the PC market is faring, as the company's chips are used in various desktops and tablets. The holiday quarter presents a good opportunity to analyze sales for desktops powered by Intel's newest-generation processor – Kaby Lake – and whether customers have been upgrading their systems.

Following are five areas partners should keep an eye on related to Intel's earnings.

How Can Partners Tap Into The Internet of Things?

Intel has been heavily investing in the Internet of Things over the past year – the company just unveiled an IoT retail platform that marks a $100 million investment. Last quarter, the company's IoT group revenue rose nearly 19 percent to reach $689 million, a figure that CEO Brian Krzanich said represents an all-time revenue record for the IoT segment.

"I'll be looking for continued progress in Intel's IoT segment," said Pat Moorhead, president and principal analyst at Moor Insights & Strategy, a market research firm. "I like that Intel is engaged in areas of IoT where they can be really competitive – areas requiring processing power either by the CPU or the GPU. Security cameras are a great example of that."

Key for partners will be news around what specific IoT use cases Intel is deploying in the market and what opportunities there are for the channel around IoT.

What Does The Qualcomm-Apple Lawsuit Mean For Intel?

It will be important to the channel to hear if Krzanich talks about the Qualcomm-Apple dispute and what it means for the chip company. Last week, Apple filed a lawsuit against Qualcomm, alleging the chip manufacturer demanded "onerous, unreasonable and costly" terms for licensing its patents. Apple also alleged that Qualcomm withheld $1 billion in rebates for keeping Qualcomm modems in products like the iPhone and iPad. Qualcomm, which manufactures baseband processors for mobile phones, has been a chip supplier for Apple; Apple also pays the company licenses to use its wireless patents. However, the lawsuit also has big implications for other competitors in the chip industry – including Intel.

"Intel has a lot to gain if Qualcomm's business model shifts. ... I'm interested to see if they have any comment," said Moorhead.

What Can We Expect From The PC Market?

What Intel has to say about the PC market will impact many partners' business. Over the fourth quarter, market research firm IDC reported that worldwide shipments of traditional PCs such as desktops, notebooks and workstations dipped 1.5 percent, indicating that the PC market, which has been in decline since 2012, is seeing stabilizing growth,

"We know the PC market did OK and was within expectations," said Moorhead. "I want to hear from Intel more about how it is split between commercial and consumer."

Key will be how the chip company will continue to approach the market – particularly as Krzanich has said that Intel would focus on "areas of growth" within the client compute segment like the enthusiast market or 2-in-1s.

What Is Intel's Data Center Strategy?

Intel's data center segment has been the star of the show in the chip company's past few quarters. In Intel's third quarter, revenue for the Data Center Group – which offers products that are priced higher and feature wider profit margins than PC chips – rose 10 percent, and the company now generates 30 percent of its revenue from data center chips.

Partners in particular will be eyeing the data center as Intel faces increased pressure in this segment.

Will There Be More Changes From Intel's Restructuring?

Updates on how Intel's restructuring efforts are coming along and whether the company will face any changes in the coming year will be crucial information. Last April, Krzanich shocked the industry with the news of massive layoffs and a major restructuring initiative to tighten focus on "areas of growth." As part of this initiative, the company said it would cut 12,000 jobs globally -- about 11 percent of its workforce – as well as restructuring efforts to pivot its focus from the PC market to the lucrative data center and Internet of Things markets.

In the third quarter, Intel disclosed that the total restructuring cost would total around $2.3 billion.