SAN JOSE, Calif. It's not a recovery, but the PC market's slide seems to be slowing according to one financial analyst firm. Meanwhile, Intel is positioning itself for growth in embedded markets beyond the PC, said an analyst at the firm.
"While [PC] end demand remains depressed, the period of demand
destruction appears to be largely behind us," said analyst Dinesh Moorjani of Broadpoint.Amtech (Greenwich, Conn.) in a recent report. "While visibility into 2Q is low, our checks pointed to expectations for overall PC builds to be flat to slightly up," he said.
Citing demand improvement in China, the company bumped up by one point its estimates of the growth in PC unit sales and revenues in 2009 to -7 percent and -15 percent respectively. It also noted retailer Best Buy reported strength in notebooks and flat-panel TVs in its latest quarter.
Market watcher iSuppli recently forecasted the PC market will be essentially flat in 2009. International Data Corp. said recently that CPU shipments were down 17 percent in the last quarter of 2008 and projected the decline to last through the first half of 2009.
Separately, Broadpoint.Amtech raised its estimates for April quarterly revenues from Nvidia from $496 to $528 million, citing an uptick in its monthly orders for its graphics processors and PC chip sets. "The present trough appears less severe than previously believed with backlog recovering and lead times improving," said analyst Doug Freedman.
Storage and memory sectors still look bleak. The firm predicted more cuts and consolidation will come in the hard disk market before product prices improve late this year. Similarly, it estimates the DRAM market will not see a balance of supply and demand until the end of the year.
In this climate, Intel is positioning itself for greater growth outside the depressed PC market, said Freedman, citing the recent patent suits between Intel and Nvidia.
"We believe Intel's intent is not to prevent Nvidia from using [Intel's new] Nehalem [processor interconnect for its chip sets], but to use litigation as leverage for obtaining necessary intellectual property and cooperation from Nvidia--even possibly seeking IP in support of its non-PC SoC initiatives," he wrote.
In addition, Intel's recent moves regarding stock sales "gives it the flexibility to act on opportunities that expand its IP portfolio in support of non-PC related revenue," Freedman said. "We continue to believe investors are underestimating the effort Intel is placing on non-PC revenue sources," he added.
In mid-March, Freedman raised Intel from a neutral to a buy rating. "We believe the market has yet to price in Intel's serious attack on new revenue sources, including its Larrabee GPU and non-core PC embedded computing and SoC opportunities," he wrote in a research note.
In early March, Intel struck a deal to let third parties build their own SoCs with its Atom processor technology using TSMC's fab. Freedman suggested long term revenues from the deal could be significant for Intel because it has not penetrated many large chip markets including mobile application processors.