Intel says consumer devices to lead Gulf sales

20 October 2010

Chip maker says 75 per cent of processor sales will be from consumer devices

US-based microchip maker Intel expects 75 per cent of its GCC processor business to be made up of consumer devices by 2014, up from today’s 54 per cent. Globally, Intel expects its market to grow three times by 2014, in terms of units sold.

Processors for devices such as laptops and netbooks make up the bulk of those sales. The Atom processor, which is used in netbooks, takes under 20 per cent of that processor market share, but is a growing business, the company said.

Nassir Nauthoa, Intel general manager for the GCC said: “We are ahead of what we planned for this year for the GCC.”

Although Intel expects to see big growth in its consumer processors, the revenue per unit for its Xeon server processors is more valuable. But Xeons sell in far lower volumes, making the consumer processor sector an attractive business. “[Plus] in this region there is more disposable income for consumer products,” said Nauthoa.

In its most recent quarterly results, Intel’s revenues surpassed $11bn for the first time, showing growth of 18 per cent over the same period last year, with a net profit of $2.96bn, up 59 per cent. Much of that growth was driven by emerging markets, such as the Middle East, Nauthoa said. 

One market in which Intel has desires but no foothold is that of mobile phone handsets. Intel admits it should have moved into this sector much faster and now faces an uphill battle to overcome tough incumbents such as Qualcomm. But Nauthoa said analysts had a similar attitude when Intel said it would produce server processors, because it was then known as a company that produced processors for desktop PCs.

It has an alliance with LG and in early October set up a Joint Innovation Center with Nokia in Finland to conduct research on mobile devices. It needs support from more handset manufacturers to make in-roads, but will ship processors for mobile phones next year.

One reason Intel is keen to break into that market is because mobile phones are moving closer and closer to the laptop and netbook market in terms of capabilities. Within the company’s Cloud 2015 Vision programme, Intel expects there to be 2.5 billion people connected to the internet and 10 billion net-enabled devices by that date, double the current number. Although this number includes computers, Intel knows that without a strong presence in the handset sector, it will miss out on a huge future market.

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