Despite weakness in the PC market, Intel (INTC) has been doing well. The company is focusing on various other segments such as data centers and notebooks to propel its growth going forward. For example, its data center revenue grew 11% last quarter and the enterprise segment also gained modestly with a 3% increase over last year, while cloud, networking and storage increased in excess of 20%.
Looking ahead, Intel is expecting more than 70 two-in-one designs for the back-to-school selling season. These trends, in combination with renewed interest in Windows 8 from its customers are encouraging.
More Ramp Ups Ahead
It is ramping more than 130 Atom microarchitecture notebook and desktop designs with its Bay Trail M&D platforms, significantly increasing its presence in the value segment. Intel exited the quarter with market segment share leadership on Chrome Systems and saw positive traction in small form factor and all-in one computing.
In DCG, it launched its Ivy Bridge MP server CPU family known as Xeon E7. The new E7 line, which features the largest memory footprint in the industry, saw particularly strong reception from enterprise as a result of its high speed, real-time data analytic capabilities. It also announced an important strategic alliance with an investment in Cloudera which is designed to accelerate Hadoop innovation and penetration, particularly on IA.
Intel is making further investments in order to achieve long-term success in all of its market segments, from 2 in 1s all the way through to the Internet of Things necessary for leadership. It announced multi-year, multi-device agreements with Lenovo, Asus, Dell and Foxconn to expand availability of out-of-base smartphones and tablets at Mobile World Congress in February.
Intel’s first LTE solution, the 7160, is now available in the Samsung Galaxy Note 3 Neo and the Asus Fonepad 7, in addition to the previously announced Samsung Galaxy Tab 3. Its Cat 6 LTE solution, the 7260, with carrier aggregation, is on track to ship this quarter. And Samsung, Asus, Lenovo, and Dell are all committed to the platform on a combination of phone and tablets, along with module vendors like Huawei and CLR Wireless.
Intel demonstrated SoFIA, its first integrated apps processor and baseband, after adding it to the roadmap late last year. It’s on track to ship the 3G solution to OEMs, with the LTE version following in the first half of 2015.
It is working to extend Intel technology into the fast-growing world of interconnected devices in the new devices and Internet of Things Group. It completed the acquisition of Basis, which provides access to new world-class technology.
It began production on its 14-nm process technology and remains on track to launch Broadwell in the second half of the year in the Technology and Manufacturing Group.
Robust Growth Ahead
Intel continues to see robust growth across segments with particular strength in point-of-sale devices in retail and automotive in-vehicle infotainment systems with the Internet of Things Group depicting an increase of 32%. The revenue for full year 2014 is expected to be approximately flat to 2013. The PC Client Group revenue is expected to decline in the mid-single digits and the Data Center Group revenue to grow in the low double-digits.
The recent quarter was a solid start to 2014, reinforcing its view of the underlying market trends. The PC market has stabilized and it witnessed unit growth for the second quarter in a row. In Data Center, Intel continues to see robust growth rates in the cloud segment and the enterprise segment grew in the quarter. It is seeing several design wins in LTE and ramping its tablet volume rapidly that will result in a second half revenue ramp.
Its Internet of Things business grew over 30%, and it’s driving significant innovation in this area with its investments to extend its architecture into the very low power space and acquire IP and capabilities.
Intel is well-positioned for growth from different areas. This is why investors should definitely take a closer look at the stock for the long run.