The PC industry is in its steepest, longest decline in history, but Intel's new CEO Bryan Kraznich thinks there might be a way out. In his first quarterly earnings call — where the company reported flat revenue and declining profits — he just told investors that Intel is about to flood the tablet market with a host of inexpensive devices, and that building "ultramobile" chips is now the company's highest priority.
"Intel was slow to respond to the ultramobile PC trends."
"Intel was slow to respond to the ultramobile PC trends," admits Kraznich. "The traditional PC market segment is down from our expectations at the beginning of the year, while ultramobile devices like tablets are up." In order to take advantage of that interest in more portable computers, the CEO says that Intel's new Haswell and Bay Trail chips will power a host of new clamshells and tablets, including a whopping 50 new convertible "2-in-1" designs with folding, flipping, or detaching keyboards.
Kraznich claims those convertibles will sell for around $400, with more traditional form factors cheaper than that. Touchscreen laptops could cost under $300, and dedicated tablets under $200, or even under $150 when they go on sale this holiday season, he suggested. "As we move into next year, those price points will continue to drop," he says. The Intel-powered, Android-based 10.1-inch Galaxy Tab 3 costs $399, for reference.
Moreover, some of those devices may run Windows 8 and Android on the same exact hardware designs. "The fact that x86 works on Android and Windows is a real advantage to our OEM base. They look at that and say that they can have one architectural design, one set of products, and use both operating systems," says Kraznich.
Though the company's Core processors (aka Haswell) will contribute some of the more powerful, pricier tablet designs, Intel says that Atom will become more important in future. The company's Silvermont core is the beginning of an Intel directive towards faster improvements in its low-power chips, and Kraznich says Intel plans to put its weight behind that goal. "We will move Atom even faster to our leading edge silicon technology," says Kraznich, describing plans to "make Atom an equal player in technology leadership for the ultramobile space."
Is the era of the Netbook over, or just getting started again?
From everything we've heard (admittedly from Intel) about the Silvermont Atom line, it sounds like it might no longer be underpowered compared to the company's mainstream Core processors, the way that older Atom netbook and tablet chips were. That poses a minor dilemma. If Atom gets too good, as one investor asked on the call, couldn't it potentially cannibalize Core sales? Kraznich attempted to address that fear, saying that the company simply believes the new Atom will allow Intel to get to new markets and price points that it hasn't achieved before.
Only Intel has seen these price points before. If the new Atom is too weak, it could be netbooks all over again — only this time, many of those underpowered machines will have detachable keyboards and touchscreens.
And even if Intel hits the sweet spot with Silvermont, it might not be enough to convince consumers to buy a truly bargain basement tablet. Acer's Iconia W3 offers a full Windows 8 experience for $379, but the hardware is so poor that we couldn't possibly recommend it.