Anyone with questions about why Intel and Advanced Micro Devices are looking to expand into the tablet and smartphone markets need only look at the most recent data on the global PC space.
Market research firms Gartner and IDC reported April 13 that the worldwide PC market in the first quarter saw its first year-over-year shipment declines for the first time in six quarters, due in part to the popularity of tablets. With Apple’s iPad 2 now on the market and a host of new tablets from the likes of Research In Motion, Samsung, Motorola, Dell and Hewlett-Packard either in store or on their way, tablets could continue to be a force in the PC space.
Tablets weren’t the only reason for the lower-than-expected first-quarter numbers–IDC analyst Bob O’Donnell said the extended PC life cycles and lack of "compelling new PC experiences" also played a role–but sales of both tablets and smartphones are only projected to grow, and grow fast.
As executives with both Intel and AMD prepare to announce quarterly earnings this week–April 19 and 21, respectively–the health of the PC market that the two currently dominate will cast a large shadow over the companies.
"Weak demand for consumer PCs was the biggest inhibitor of growth," Gartner analyst Mikako Kitagawa said in a statement. "Low prices for consumer PCs, which had long stimulated growth, no longer attracted buyers. Instead, consumers turned their attention to media tablets and other consumer electronics. With the launch of the iPad 2 in February, more consumers either switched to buying an alternative device, or simply held back from buying PCs."
The numbers from Gartner and IDC caused concern among financial analysts, some of whom said in research notes that they had lowered their estimates for both chip makers, and at least one–Romit Shah, an analyst with Nomura Equity Research–predicted that the situation could impact the first-quarter numbers from Intel and AMD and their forecasts for the second quarter.
Currently a large majority of mobile devices–including tablets and smartphones–are powered by low-power chips designed by ARM Holdings and built by the likes of Qualcomm, Texas Instruments and Samsung. Other chip makers, such as Nvidia, also are signing up with ARM. The projected numbers in the market explain why. Gartner is forecasting that tablet sales will grow from almost 70 million this year to 294 million in 2015. At the same time, market research firm In-Stat is predicting 850 million smartphone sales in 2015.
For more, read the eWEEK article: Intel, AMD Will Challenge ARM in Tablets, Smartphones.