

Intel’s Profit Falls 27% as PC Sales Drop - clicks
http://www.nytimes.com/2013/01/18/technology/intel-earnings-are-sharply-lower.html?src=recg

======
blisterpeanuts
PC sales dropping? Dell talking about going private? HP losing money? Tough.
Let them try harder to win business. Here are a few suggestions.

1\. Eliminate the Windows tax. From now on, vendors should offer bare systems
that can run Windows and/or some flavor of Linux, Chrome OS and maybe even
Android. Give me a radio button for each, so that I can watch the price change
as I toggle. Enough with the "comes with Windows 8, but we won't tell you how
much that costs."

2\. Offer multiple years warranty. A car typically is 3 years or 36,000 miles.
So why can't a PC be guaranteed for 3 years or 10,000 operational hours? I've
seen so many components fail after 91 days, and then we're into a painful
customer assistance process with some guy in Bangalore reading scripts in some
dialect that sounds like English.

3\. By the way, offer real customer service, not some guy in Bangalore reading
scripts in some dialect that sounds like English.

4\. Work harder to shield the user from malware: build more security into the
hardware, e.g. trusted certificates and low level trusted, signed checking of
application binaries.

5\. Touch screens.

6\. Get more creative with the form factor. Mac Mini is a good example of an
elegant, efficient unit that doesn't look and sound like an air conditioner
sitting under your desk, yet is packed with useful ports and computing power.

7\. Tout your products as the mother ship for mobile devices. Provide tablet
connectivity and drivers out of the box, and include bluetooth rather than
making me order a $10 dongle online just to have this basic feature.

Just some ideas; anyone got anything else?

~~~
ars
None of that will help.

1\. People don't want barebones systems - they want a fully working computer
they turn on and use. People who want a barebones system do it themself, and
are not a large market.

2\. That just increases costs, and will not increase sales. You want it,
obviously. But it won't help the seller.

3\. Same as #2 - that doesn't increase sales, and does increase costs.

4\. Good luck with that. Microsoft is trying that with secure boot (with
hardware support), and people are screaming about it.

5\. Gorilla Arm. Assuming you are talking about a PC, it's not practical to
use a vertical touch screen.

6\. A good suggestion. Market computers the way kitchen appliances are
marketed: By how they look, with some discussion of functionality, but looks
are paramount.

7\. It's nice I guess, but I'm not sure it'll help all that much.

~~~
blisterpeanuts
Ars - re #1, I am not saying make Grandma install Win/Lin/*os, but rather make
it an option during the buying process.

I'm pricing new cars right now and the makers are doing these interactive
build-your-car websites where you select every single accessory and option and
watch the price go up or down accordingly. Admittedly, Dell has had such a
service for years, but preinstalled Windows is usually non-negotiable. Just
automate the OS install process (if it isn't already) and let the user shave
the $80 off the price if he prefers a free OS rather than a paid OS.

~~~
ars
It actually is an option from most sellers, it's just not really promoted, but
if you look you can find it.

If it was easier to find people would remove windows thinking "why do I need
this" - and then call tech support when the computer doesn't work.

A _single_ tech support call eats all the profits of the sale.

------
DigitalSea
I refuse to believe the PC is dying, evolving perhaps but not dying. People
have been saying PC's are dying for the last 10 or so years and yet here we
are, commenting on HN using our PC's and Mac's (which are PC's at the end of
the day). Tablets in my mind will never work for programming or designing. I
will always need a large screen and peripherals like a keyboard at the very
least to do my job. Could anyone else here imagine developing on a tablet
screen? I couldn't.

~~~
sleepydog
I would like to see the rise of the home server. Cloud services have latency
and privacy issues. Imagine a small, powerful and energy efficient server that
you could tuck away in a closet and connect to your gigabit or faster network.

This server would provide all the horsepower, centralized storage, and session
management (think IRC chat etc) that you need -- and you can access it on any
device in your house.

Imagine a keyboard running a tiny OS that could detect the nearest registered
display. You could write code on the TV for a few hours, walk over to a desk
and pick up where you left off. That's what I would eventually like to turn my
home into (by setting up a Plan 9 network and writing terminal clients for
android set-top boxes), but it's hard to find the perfect home server.

~~~
DigitalSea
I've been dreaming of a home server revolution for years myself, but sadly due
to the fact in Australia the Internet is slow and we're only just now rolling
out a national 100mb fibre network which won't be finished for quite a few
years and will be expensive with little guarantee of a decent data allowance
doesn't give me much hope. Cloud storage is definitely not ready for the
prime-time yet, I don't trust it and as Amazon has proven even they haven't
even quite worked out how to reliably provide cloud services.

------
mtgx
This is something I've argued before, too. Even if Intel gets every bit as
good as the ARM competition in mobile devices, that may be pretty irrelevant
to them, as they will have a very hard time competing as "just another mobile
chip maker with tiny profits per chip". It will be hard for Intel to adapt to
that as a company. And that's besides having to defeat established incumbents
in the mobile chip market. The end of the "normal" PC market is not good at
all for Intel.

As the situation becomes worse for them, you'll see them adopt more desperate
moves such as mandating every "ultrabook" (a trademark they own) manufacturers
buys their McAffee antivirus, and other such moves, to try to increase their
profits and revenues, but I don't think it will help them much in the end.

The ultrabook market is a dead-end, anyway. So far their ultrabook sales have
been several times lower than initially predicted, and most PC buyers want to
buy "cheap" Windows machines, not $1000 Windows machines. The people who want
that kind of PC, usually go for a Mac instead, and the latest sales data shows
that. And Macs are still a niche market in the grand scheme of things. It's
about the best Intel can hope for as far as "ultrabooks" go. And they better
hope Apple is not moving to 64-bit ARM chips for Macs in 2014.

~~~
dangrossman
With full-power Intel Core chips rolling off the line today using <7W of
power, we're almost at the point where you can have MacBook Pro computing
power behind the glass of a tablet and still get 8+ hours of run time. Dock it
to a hard keyboard with another battery to turn it into 12-16 hours. That's
today, and it'll get better every year as the processors and batteries
improve.

I think Microsoft is actually ahead of the curve here, and the tablets of the
near-future will be more like the Surface Pro than the iPad. Your grandma can
use hers to check e-mail and run pre-screened apps from an app store, while
you can use yours to run Visual Studio or Photoshop. With full computing power
in tablets, they could supplant not just Android/iOS but laptops, ultrabooks,
netbooks and desktop towers.

~~~
j-g-faustus
Why would grandma want to buy a powerful $1000 tablet when a $200 tablet can
do everything she wants to do perfectly fine?

The main issue is that the vast majority simply don't need all that much
computing power, it was the lack of alternatives to the PC form factor that
kept CPU power, prices and Intel's profit margins inflated.

I don't doubt that there will be a market for powerful tablets. But it's a
small market; the grandmas of this world won't be buying them any more than
they used to buy powerful workstations.

~~~
bad_user
> _a $200 tablet can do everything she wants to do perfectly fine?_

Show me one table at $200 that does everything a grandma would want.

> _The main issue is that the vast majority simply don't need all that much
> computing power_

That's just wild speculation that needs a reference, especially since the
history of PC proves otherwise.

~~~
onedev
Nexus 7? Or for a $100 more, an iPad Mini...

~~~
mitchty
Yep, basically we've hit that point where computers are the appliances people
always wanted them to be.

Intel is going to have a hard time keeping high profit margins on lower cost
chips. If any company can handle it though they should be able to.

------
jxdxbx
I think most OEMS would rather do without the very real technical advantages
that Intel brings, than be stuck with Intel. If they could switch to ARM for
PCs easily they would, and there's no way they're going to sign up for Intel
chips on mobile devices, at least not unless it starts making ARM itself.

Say Intel is a process generation ahead of everyone and has fancy tri-gate
transistors and what have you first. Is it really worth abandoning all that
ARM gets you--the ability to design custom silicon, bid different foundries
against each other, etc?

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xradionut
In the consumer world, "Wintel" should be wary of the future.

Except for the one beefy laptop/workstation and my wifes gaming PC, (both
which should be good for years), most of the devices we have bought or
planning to buy don't require an expensive Intel CPU/chipset. And we don't
need any new Windows software outside of the annual Quicken/TurboTax update.
For portable use, there's smartphones and I'm thinking a good ARM based Linux
laptop should be hitten the market soon enough.

~~~
pekk
Why are we still saying "Wintel" when Macs have been using Intel processors
for years, and now non-Intel platforms are a much more significant part of
Microsoft's strategy than ever?

~~~
mitchty
I think the distinction is the windows/intel portion of the market. Of which
macs aren't at all a member. Basically the 90's/2000's are over for the
Windows/Intel "sure thing".

Given Microsoft is now also looking at arm, Intel is going to have a harder go
at the Windows side of things. And if the rumored Apple arm laptops pan out,
they've lost a very high end vendor as well. But I'm deviating from my reply,
enough squirrel banter.

------
redwood
Anyone know what % of Intel chips go to the datacenter/server market? It must
be higher and higher all the time. Perhaps it'll eventually be the majority!

------
ritonlajoie
And AMD's stock price got it worse than Intel's.
[http://finance.yahoo.com/q/bc?t=5d&s=INTC&l=on&z...](http://finance.yahoo.com/q/bc?t=5d&s=INTC&l=on&z=l&q=l&c=AMD%2C+&ql=1)

------
georgeott
CPU's have reached the inevitable point where 90% of users simply do not need
that kind of speed.

You can build a car that goes 200mph, but there are not going to be many
buyers.

------
ableal
The interesting question is whether Intel is going to sell fab capacity to
third parties.

Given the umpteen billions they have invested in semiconductor fabrication
plants, and the lack of sales of their own chips ...

~~~
SkyMarshal
And their lead in process technology. I would think that alone would drive
some demand from third parties wanting to one-up their competition in a way
that can't (easily) be countered.

~~~
caw
They already started doing it: [http://arstechnica.com/business/2010/11/intel-
shifts-strateg...](http://arstechnica.com/business/2010/11/intel-shifts-
strategy-sells-22nm-fab-capacity/)

~~~
ableal
Good catch, I missed that. Probably still some way off from having PDKs
(physical design kits) and a pricing sheet for Nvidia or other random fabless
design shops to make their chips.

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vezycash
Profit or earnings?

~~~
adamt
Profit === Earnings (<http://www.investopedia.com/terms/e/earnings.asp>)

From the article: "reported net income of $2.5 billion, or 48 cents a share,
down 27 percent from $3.4 billion, or 64 cents a share, a year earlier"

Which is a 27% drop in total earnings or a 25% drop in EPS. The difference due
to a share buy back improving the EPS by reducing the issued share capital.

~~~
vezycash
thanks

