Intel’s Profit Falls 27% as PC Sales Drop
nytimes.com
nytimes.com
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?
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.
This market is seriously under-served and unappreciated. And in fact it's why Windows 8 will be seen as Microsoft's biggest disaster.
4. I agree and in fact it's why I think today's walled gardens will fail, while the PC will prevail, just like in the console wars of a couple of years ago.
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.
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.
Of your ideas, I like #6 the most. People decry the death of the desktop PC, but for years now I have been of the opinion that none of the PC manufacturers are trying to do anything interesting on the desktop. Hence, no one feels any incentive to upgrade.
My highest-ranked idea for breathing life into the desktop PC is ultra high-definition very-large displays. Everything else falls into place from there. Ultra high-definition requires new GPU technology, potentially higher storage capacity, higher bandwidth, etc.
I've written about that here: http://tiamat.tsotech.com/displays-are-the-key
For creators, PCs are indispensable. Like you, I couldn't fathom using an iPad to write code or prose.
However, consumers don't need the creative powers and capabilities of a PC. In this paradigm, phones and tablets are a simpler, more portable consumption terminal.
Creators, both business and otherwise, will need machines that let them design, code, write, and analyze. Consumers never needed these capabilities, and now that there are compelling devices that offer an arguably superior media consumption experience, creation machines will be put on the margin.
A significant minority of non-professional users of computing devices are consumers, rather than creators of content. But the defection of this significant minority is enough to impact the bottom line of companies like Intel.
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.
Power users (developers, designers, etc) are such a small fraction of overall users we might as well be 0%.
I'm excited about Haswell, but only because it's supposed to come in under 10W. I feel like MBA battery life took a step back with Sandy Bridge/Ivy Bridge (the mid-2010 model lasts forever on a charge).
And they have been, losing sales first to consoles and then to smartphones and tablets. Children are growing up on Xboxes and iPads, not PCs.
Desktop PCs will be like pickup trucks, to reference Steve Jobs's famous analogy. Someone will always need them, but most people won't have them.
The day that providers start releasing tablets with 1TB of storage and ability to add-on additional storage with ease is the day a tablet can compete with a computer. We live in the day and age of extreme data consumption, tablets with their minuscule 64gb of storage aren't enough to store the modern day PC users information. Cloud storage might eventually fill that gap one day, but the Internet even in some of the most developed countries is still unbelievably behind and bandwidth still expensive (and I would know, I live in Australia and people in New Zealand pay even more for less) not to mention cloud storage as proven by Amazon's constant downtime isn't reliable enough to store information that is guaranteed to be accessible all of the time nor can you access cloud data without an Internet connection and wireless Internet connection options like 3G or 4G are very expensive for so little in data allowances.
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.
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.
Even with the keyboard attached it weighs less than a macbook air.
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.
Geeks tend to forget that a vast portion of the population just needs a web browser, a handful of popular games, chat, and email.
With everyone hopping on the Facebook train, it's not even clear that chat/email is really that required anymore.
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.
That time is long gone. As a developer, laptops have been fast enough for my purposes since around 2000.
Coding Horror, 2010:
CPUs? All stupid fast at any price, with more cores
and gigahertz than you'll ever need unless you're one
of those freaks who does nothing but raytracing and
video transcoding all day long.
Excluding servers and scientific computing, the only groups I know of that still want more power are hardcore gamers and video editors. Even for these, the bottleneck is frequently somewhere else than the CPU.
I think my mother and sisters represent mainstream computing better than I do: The check mail, watch YouTube videos and look at pictures of the family. There's nothing there that requires more computing power than what tablets have today.
The Google Nexus 7 is $200. It has enough computing power for what most of my family uses computers for. It still has other limitations that may make it unsuitable as a wholesale PC replacement - say ports for plugging in a large monitor, options for printing, drivers for various USB devices - but those limitations do not primarily call for a faster CPU.
If you disagree, I'd be curious to know where you see a mass market for significantly more CPU power than what we expect from the natural evolution of ARM.
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.
So.. everything?
If anything it tells me even more that Intel is looking to gradually morph the ultrabook brand to mean slim, powerful hybrid/convertible as the technology makes it possible. ie: they're trying to evolve the notebook computer in such a way that it encrouches on the 'tablet market', just as tablets have made their way into the pc market...
More significantly: simply because the ultrabook exists, the other 'normal/cheap' laptops are getting slimmer, cheaper and all-round better.
I think the mac/windows drama is still on on -- with the ipad and devices like it marketed to consumers an entertainment device, and Wintel keeping the productivity market.
Right now, they only lack the humility to apply that to low-cost energy saving chips. I'm sure lost profits will apply the necessary pressure.
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?
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.
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.
You can build a car that goes 200mph, but there are not going to be many buyers.
Given the umpteen billions they have invested in semiconductor fabrication plants, and the lack of sales of their own chips ...
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.