Chin and Eliscu, who have a Neutral rating on Intel shares, and a $22.50 price target .
UBS semiconductor analysts Stephen Chin and Steven Eliscu today offer their thoughts on what the next CEO of Intel (INTC) needs to do as Paul Otellini steps down next month.
Intel has not yet decided on a successor to Otellini, though a number of candidates have been speculated about, and there have even been reports that headhunters were approaching major tech CEOs such as Nvidia‘s (NVDA) Jen-Hsun Huang.
Chin and Eliscu, who have a Neutral rating on Intel shares, and a $22.50 price target, write that too much attention has focused on Intel’s need to come from behind in chips for smartphones and tablets, while the true focus should be on how to repair lack of growth in desktops and notebook computers.
Much of the discussion about Intel’s next CEO has centered on its need to “fix” its mobile strategy. However, for what Intel is lacking to date in its mobile market penetration, we believe it could make up going forward with its next generation productsTo rejuvenate PCs, we believe its next CEO needs to refocus on cost reduction of ultrabook-(like) form-factors that can bring the 4 key iPad features – high-res touch display, light-weight, instant-on, long battery life into the $600-900 range. Longerterm, we believe he/she must look beyond PCs and even smartphones, which will be maturing by the time Intel ramps its 14nm products, and generate a further-reaching vision for the direction of client computing as Google is doing with Glass.
The authors also think Intel needs to press its advantages in server processors to lock out competing chips based on ARM Holdings (ARMH) technology:
The challenge for its next CEO will be to vigorously defend vs competitive
products (mainly ARM-based) that could gain acceptance for large enough slices in the data center market that in turn could noticeably slow Intel’s server processor growth. Server processor users such as Facebook and Baidu b
I really like what Cube Money said on SA concerning Intel:
"Today, that arrogance has evaporated and they instead exude confidence. This has already been demonstrated by Intel's ability to get into the phone space today. (Ok, they are in the non-US markets, but that's an LTE issue and it's a good trial balloon) They listened to the customers and don't just provide silicon - they provide software, form factors, etc. This evaporation of arrogance will be demonstrated once again if they get the major media outlets to enable the TV Service they are lining up - something that APPL's arrogance will prevent them from being able to do. Why? Because the media outlets are big dogs too and have successful business models. APPL feels they are negotiating from a position of strength (so did INTC in their first mobile attempt/fiasco). APPL likes control - something big media will not allow them to wrestle away."
My comment: It was the development that TimeWarner/HBO and Viacom/CBS/Showtime were rumored to be interested in working with Intel Media that shocked me into realizing Intel might be emerging with a new and improved personality to go along with their power and competence. Just like Cube Monkey says "arrogance has evaporated and they instead exude confidence."