UPDATE 2-Do PCs have a future? Intel thinks so

Tue Sep 11, 2012 4:03pm EDT

By Noel Randewich
    SAN FRANCISCO, Sept 11 (Reuters) - Intel Corp 
showed off hybrid tablets and ultrabook laptops with voice and
gesture recognition technology along with an upcoming low-power
chip in a bid to convince Wall Street a slump in the personal
computer industry is only temporary.
    At the annual Intel Developer Forum in San Francisco on
Tuesday, the company demonstrated a range of mobile devices,
many of them crosses between tablets and laptops. Executives
showed sleek "ultrabook" laptops with improved gesture- and
voice-recognition features, similar to those already found on
some smartphones.
     Intel's upcoming processor, code-named Haswell and due to
appear in a crop of laptops during next year's holiday season,
will improve on computing and graphics features and is targeted
to reduce electricity consumption from 17 watts to 10 watts,
according to the company. 
    The chip will allow devices to stay on longer without
needing to recharge and underscores the Intel's recognition that
mobility will only become a bigger factor in personal computing.
     "It was designed with mobility in mind ... from sleek
tablets to ultrabooks to high-performing desktops," said David
Perlmutter, general manager of Intel's Architecture Group.
    In an interview with Reuters, Perlmutter steered away from
strict categories of laptops and tablets and said manufacturers
over the next few year will offer a wider range of mobile
products for consumers, mixing and matching new features,
performance and size.
    Recent launches of smaller tablet sizes by Google and Amazon
are examples of the already growing range of devices consumers
have to choose between, a trend that will gain more steam, he
said.
    "There will be a variety of needs fulfilled by a variety of
solutions. Some people want something very benign, very simple,"
Perlmutter said. "Others need performance."
    
    INVESTORS WATCHING
    For Intel, showing off its most recent innovations at the
forum this week is key to convincing investors and hardware
developers that the PC industry remains innovative and still has
a future.
    Perlmutter pointed to tablets with extendable screens and
laptops with removable keyboards as devices that he said might
catch on with the upcoming release of Microsoft Corp's 
Windows 8, which will feature touch capability.
     Intel's tablet strategy so far has focused on Windows 8,
but Perlmutter said tablets running Intel processors and
widely-used Google's Android platform are also in the works.
    The top chipmaker cut its third-quarter revenue estimate
more than expected on Friday due to a decline in demand for its
chips as customers reduce inventories and businesses buy fewer
PCs. 
     Intel's processors are used in 80 percent of the world's
PCs, but the Santa Clara, California, company has been slow to
adapt its chips for smartphones and tablets. It now trails
Qualcomm Inc and Samsung Electronics Co Ltd
, which design their chips with power-efficient
technology licensed from ARM Holdings Plc. 
    The combined market for PCs, smartphones and tablets is
expected to almost double over the next four years, but Intel's
share of the processors used in them will dip from 35 percent to
29 percent, according to a report this week from IHS iSuppli. 
     While macroeconomic troubles have weighed on sales for
several quarters, the growing popularity of tablets and
smartphones is seen as an existential threat to the PC industry.
    The Haswell chip's improved power efficiency is a step in
the right direction to offering consumers punchy performance in
thin laptops without sacrificing battery life, said Evercore
analyst Patrick Wang.
    "Will it stymie the shift towards tablets and smartphones?
Not yet, but only time will tell," Wang said. 
    As well as investors, Intel's forum is visited by thousands
of hardware developers, many of whom face decisions about
whether to focus their resources on the PC industry or mobile
devices using chips made by Intel's rivals.
    Intel is heavily promoting premium Ultrabook laptops powered
by recently launched Ivy Bridge processors. But Wall Street
investors say that adding costly touch screens to models due out
soon may make them too expensive for many consumers. Many
ultrabooks currently on the market, without touch screens, cost
over $1,000.
    Perlmutter said bringing down the costs of building
ultrabooks to make them more mainstream is a challenge Intel is
working on with PC manufacturers.       
    Underscoring the shift in focus toward mobile, Apple on
Wednesday will become a distraction for participants at the
forum when it is expected to launch its newest iPhone at a
nearby venue. 
    Some analysts said Perlmutter's speech was light on details
about future products than keynotes in previous years. 
    "This time around, the company only highlighted a few
next-gen features, lacking the details to show how Intel would
play more materially in the low-power segment of computing
devices," Freedman said.
    Shares of Intel were up 1.4 percent at $23.58 in afternoon
trading.