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Intel EVP on Apple testing new chip design: ‘We feel very good with where we are competitively’

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Gregory Bryant, Intel EVP and General Manager of the Client Computing Group joins Yahoo Finance Live to discuss Intel’s transformation strategy for 2021 and break down how the company is setting itself apart from competitors.

Video Transcript

BRIAN SOZZI: Joining us to discuss is Gregory Bryant. He is Intel's executive Vice President and General Manager for the Client Computing Group. Greg, good to speak with you this morning. I had a chance to catch your presentation at UBS yesterday, and you definitely caught my attention, and I suspect a lot of other, a lot of analysts on Wall Street. You know that demand for PCs has continued into the fourth quarter. What are you seeing in the market, and how sustainable is that into the next year?

GREGORY BRYANT: Well, yeah, demand in PCs has absolutely remained strong. We've seen that as obviously, there's been a need for people to work from home and to learn from home, and we see that around the world. And as we look forward, we feel good about the opportunity for the PC market both in terms of strong innovation and new platforms that we're delivering to market.

We've got that today with our 11th generation Core CPUs that we brought out for PCs. And then in addition, we've got a great roadmap of products lined up for 2021. You'll see us in pretty rapid succession deliver new SoCs for desktops and laptops in the first part of the year. And then followed on with a whole new family and a new architecture in the second half of '21 in both the PC and in our data center business.

BRIAN SOZZI: Have you seen any recovery in the desktop business? I talk to a lot of folks in tech, and desktop has been pressured this year, because look, I mean, we're all working from home, we've been working off our notebook PCs for months. Any signs of recovery there?

GREGORY BRYANT: No, that's right. We did see a strong transition kind of coming off of COVID, a change in the shape of demand more towards mobile computing, towards the consumer channel, towards education and away from desktop. But we did see that between Q2 and Q3 of this year. We did see that change. We saw desktop rebound a bit. In fact, it was up for us sequentially Q2 to Q3. And I would expect to see that to continue as we go forward. The desktop, obviously is critical for kind of that high end workstation content creation, as well as the high end gaming business.

But I think if you step back at a million feet, it's really important to note that the demand for computing in all of its forms has really increased. And that's just been driven by the need to process data. This explosion in data that people are trying to get value and insights from. Businesses need that all around the world. And obviously, that's driven the need for kind of pervasive computing in all its forms, from the cloud through the network out to the edge or even the PC, in my business.

At Intel, we're a computing company, so we see this incredible need for computing in all of its forms. And we're making investments and we're delivering leadership products in all of those segments in order to fulfill that demand. And it's a really exciting time to be in the company. We're looking at the largest opportunity for growth really in the company's history.

JULIE HYMAN: Greg, it's Julie here. I do want to ask you about Apple's push further into making its own chips and just what that does to the dynamics for your business and for the industry more broadly. What do you think?

GREGORY BRYANT: Well, thanks, Julie. When I think about it, if you step back and you just think about what I said, the tremendous demand for computing, whether that's in AI in training or inference, whether that's in the network, whether that's at the autonomous edge or even in the PC, there's a lot of growth. And companies, we expect there to be competition. When you're in a business that's healthy and it's growing rapidly, we're going to see competition, whether that's from Apple, the ARM guys or traditional competitors like AMD.

But we feel very good about where we are competitively. We've got strong products in market today in the PC with Tiger Lake, our 11 generation core product selling better than we had originally expected at the beginning of the year. In fact, about 30% above our expectations to date. And we've got a great roadmap to go compete and win and deliver brand new experiences that end users care about. So for us, it's all about continuing to lead and drive that innovation with our partners.

One of the things that makes us unique, Julie, is we have engineers all around the world who sit with our customers to go create these fantastic new platforms. We launched a new Evo-based platform at the end of this year, and we're really excited about the experiences that brings and the prospects that brings for us and our customers where we've gone out and done deep co-engineering and verification of those experiences with our customers, really for the first time at scale all around the world.

MYLES UDLAND: Greg, when you look at the way that COVID has changed the demand, I guess that you guys were either expecting or thinking about over the next several years, and we've asked a version of this question to folks across different industries, I'm curious if it changed sort of how large you saw the market coming over the next several years, and how much demand was pulled forward versus how much it set sort of where you're sitting inside Intel's business, whether it set you guys on maybe a different trajectory.

GREGORY BRYANT: That's a great question, and I get that a lot. I think some of the trends that were established towards digitization of infrastructure, towards digital transformation, digitization of services, in my business, the move towards mobility and notebooks, those trends had existed before COVID. And coming through COVID, what we've seen is an acceleration of those trends.

And I believe A, that's certainly increased the demand for PCs and other forms of digital infrastructure, as you know. But it's also changed the shape of that demand. And I believe some of that change is going to be, is lasting. Whether that's working from home. I think we'll continue to see people work at home or in a hybrid fashion going forward, where PCs are going to remain an essential tool.

We've seen increase PC and device penetration in schools and for students. It's critical to help kids in school today. I believe that'll continue. If you look kind of around the world at the penetration of devices per 100 students, I think we're roughly averaging about seven devices per 100 students around the school. Obviously, higher in the United States in mature markets. But there's still a lot of room for growth in the number of PCs in a household, the number of PCs for students, and a ton of room for growth in digital infrastructure, which you can imagine has been growing at a pretty healthy rate.

JULIE HYMAN: Greg, you're one of the longest serving or the longest tenured Intel executives on the executive team. There's been a lot of changes inside of Intel. It's been a challenging year outside of the business you run. Help investors understand, what's the status of Intel after those management changes?

GREGORY BRYANT: Oh, thanks. You know, I feel great about the team and the opportunity that we have in front of us, as I said. We've really changed the nature of Intel in a unique way. We're transforming, and we've been transforming from a CPU company to what we call an XPU company that doesn't just do CPUs. We've launched our first GPUs. We have AI chips from Habana. You saw our win at Amazon the other day. We've got an FPGA business. Having those multiple architectures is required to win in this new expanded opportunity that I told you about.

We're also moving from just selling silicon to platforms, helping our customers develop solutions that they need to be competitive in the market. And then we're really leveraging our manufacturing scale and our integrated design as we go forward. And in new kind of novel ways, to bring designs together to create leadership products. And that's what this team has been about. It's been about reshaping and transforming the company. We've thinned down the management team. We've gotten flatter, more flexible and more focused. And I really think our best days are ahead of us.

BRIAN SOZZI: All right, we'll leave it there. Gregory Bryant, Intel Executive Vice President and General Manager for the Client Computing Group. Good to speak with you. We'll talk to you soon.