Despite the downtrend of the PC industry, Intel (INTC, Financial) has managed to return value to shareholders over the last few months. PC shipments are expected to move downward, but Intel looks likely to buck this trend and move higher in the future, thanks to its slowly diversifying business. However, that doesn’t mean Intel is free of trouble as the company faces a few minor headwinds going forward.
Intel’s Core i5 and Core i7 chips play an important role in Mac computers. However, the company’s profitable business of delivering high-margin Core i5 and Core i7 chips to Mac computers faces a slight threat from the release of the iPad Pro in the market.
Apple (AAPL, Financial) cannot replace Intel processor from its Mac computers until and unless it finds a technique to build a 1:1 copy of Photoshop CC to work on the Reduced Instruction Set of Computers (RISC), a drawback of the A9X.
Therefore, Intel will carry on to get x86 processor buying orders for MacBooks, as the company’s shifting from RISC Power chips to Intel’s x86 processors was the main reason for the growth of Mac sales.
A small problem
Intel is facing difficulties improving its manufacturing yield on its latest 14-nanometer process. This states that Intel’s operative capacity to build products based on 14-nanometer process is not as high as the company thought.
Recently Apple transitioned its iMac family to 14-nanometer silicon, switching from 22-nanometer silicon. Also all other PC sellers are upgrading their desktops and notebooks with 14-nanometer Skylake chips. So Intel needs to make sure that it can deliver plenty of chips to meet the demand and make the most of this rare opportunity.
Intel’s big enhancement in graphics for Kaby Lake chip
After the launching of Intel’s latest processor, Skylake, the company plans to introduce its 14-nanometer architecture in 2016, named Kaby Lake.
According to the news from Benchlife.info, it appears that the major enhancement is in the media and display engines; 5K display output as well as acceleration of 10-bit HEVC is supported by the Kaby Lake processor, whereas Skylake was designed to only handle 8-bit HEVC streams in hardware and uses hybrid acceleration for VP9.
Intel designed the Kaby Lake chip in such a way that it can provide much stronger video and media experiences versus today’s Skylake chips, which should result in better user capability and greater power efficiency.
Despite upgrading its video and media capabilities, the company will also improve its 3D graphics engine as well as boost its performance in gaming application. With the time moving forward, the company makes many improvements to hold its position in the market.
Conclusion
Intel has vastly upgraded its product offerings, and the stock has reflected the company’s success in the past. Unless there’s a supply shortage, Intel can make the most of the opportunities at hand. The company’s diversified business model is a big plus and will allow the company to buck the downtrend of falling PC shipments.
