LONDON – Investment broker Nomura Equity Research reckons the $1 billion that Intel shaved off its forecast for its 4Q11 sales revenue is about more than just a shortage of hard disk drives hurting PC sales and thereby Intel's sales of microprocessors.
Nomura has reduced its own estimate of Intel's 4Q11 sales by $800 million to the same figure as Intel; $13.7 billion. But it does not see the hard disk drive situation being as being the only reason that the reduction is requred.
In a note to clients entitled: Intel finally blows up and subtitled: Change in outlook may highlight issues beyond HDDs, Nomura said that problems at Intel are based on a wider set of challenges. "HDD shortages are a concern, but we think weak sell-through is also contributing to the $1 billion shortfall. We see softness in China, continued demand for ARM-based more power-efficient devices, and low volumes for ultrabooks," the note said.
In other words demand for PCs and ultrabooks is weak, but demand for ARM-based processors to go in smartphones and tablet computers is high. The ultrabook is Intel's favored form factor that it hopes will take market share from tablet computers just as tablet computers have taken market share from the notebook computer and killed the netbook at birth.
Nor does Nomura hold out much hope for Intel in the first half of 2012. "We would not be surprised to see below-seasonal growth in Q1 and Q2 given lack of PC catalysts (Windows 8 likely Q3 event), increasing ASP pressure, and slowing China and Europe," the report said.
As a result Nomura has cut its forecast for Intel sales revenue in 2012 by $3 billion to $53.4 billion, which would be a fall from its estimate for Intel's 2011 sales revenue of $53.8 billion.
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