Intel’s Growth From Other Businesses Likely To Offset The Decline From Its PC Segment In Q3’16

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Leading chipset maker Intel (NYSE:INTC) is set to report its Q3’16 earnings on October 18th. Despite a sharp decline in the PC sales in the last few years, the company has managed to hold its ground by continuously focusing on adapting its technology to alternate growth markets. While the company remains cautious about the PC segment and continues to guide to a decline in the high single digits this year, it expects the combined revenue of the other businesses to deliver double-digit growth in Q3 2016. This factor is likely to help Intel post higher revenues in Q3 on a sequential basis. In the table below, we can note the key metrics as expected for Intel in Q3’16:

Screen Shot 2016-10-17 at 1.49.49 PM

Data Center, IoT and Memory Segments To Fuel Growth For Intel Going Ahead

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Data center, IoT and Memory products account for about 40% of Intel’s revenue and 70% of its operating profit. The company considers the three segments to be its strongest growth drivers in the long run. In Q3, Intel showed an increased focus on boosting its growth strategy in these segments. During the quarter, the company announced the acquisition of Movidius, a company that can help Intel take its computer vision and perceptual computing strategy to the next level. In addition, Intel entered into a definitive agreement to acquire the deep learning technology startup, Nervana Systems, which can help the company boost the AI (artificial intelligence) capabilities of its data center offering.

The company also announced an agreement with the British processor core designer ARM, through which it will offer devices based on ARM’s Artisan Physical IP on its 10 nano-meter design platform. This should help Intel boost its foundry business going ahead. Broadening its product portfolio and new partnerships in various domains should help Intel fuel the growth of its data center, IoT and memory products going forward.

 

See our complete analysis for Intel

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