Summit News

Intel sees potential in Apple iPad

SAN FRANCISCO (Reuters) - Intel Corp INTC.O sees big opportunities to expand its business in the nascent tablet PC market and has not given up hope on winning a spot inside Apple Inc's AAPL.O iPad.

While Apple has designed its own processor to power the recently-launched iPad tablet PC, Tom Kilroy, Intel senior vice president and general manager of sales and marketing, said there could be opportunities for Intel in future versions of the iPad.

“They’ve got their product to market right now, and it doesn’t include an Intel chip,” Kilroy said at the Reuters Global Technology Summit in San Francisco on Wednesday.

But, he said, “it would never be like Intel to not want to go discuss and engage Apple to win their business in another intercept point at some point down the road.”

Kilroy also said that demand for PCs in emerging economies was changing the business landscape, with Brazil on track to become the third largest market for PCs behind the United States and China by the end of the year, according to Intel’s estimates.

“It could be as early as this year, but even if it’s the end of 2011 or the middle of 2011, that’s a significant step forward in terms of both consumer users as well as business,” said Kilroy about the growth in PC demand in Brazil.

Intel is the world’s largest chipmaker and makes the microprocessors that are used in more than three quarters of the world’s PCs.

Kilroy would not break out the difference in the average selling prices of the PC processors that it sells in Brazil compared to prices in more established markets like Europe. But he said that consumers in Brazil were very active in Internet activities like social networking that require PCs with enough processing horsepower to upload and view videos and photos.

“I would say at this point in time -- Brazil, when I look at my ramp of my new Core (microprocessor) products, is very healthy as well,” said Kilroy.

He added that Intel expects China to potentially overtake the United States as the world’s largest market for PCs by 2014.

Intel was among the first tech companies to call a bottom to the economic downturn, and last month reported sales and profit that beat Wall Street expectations for the first quarter.

The chipmaker said at its annual analyst-day briefing last week that while the company is keeping an eye on the financial crisis in parts of Europe, nothing has transpired that would cause the company to change its guidance for the second quarter.

Kilroy said there was no update to the statement about the impact of Europe on Intel’s business, but noted that the diversification of the PC industry makes Intel less affected by developments in any one region.

“It’s not so much like maybe it was like five or ten years ago when so goes U.S. retail or European retail so goes the business,” he said.

In recent years Intel has developed a new line of Atom processors designed for mobile gadgets like smartphones and the emerging breed of tablet PCs.

Unlike in the PC market, where Intel's microprocessors are dominant, the mobile device market is crowded with strong competitors like Texas Instruments Inc TXN.N and Qualcomm Inc QCOM.O, which make chips based on ARM Holdings Plc ARM.L designs and architecture.

In the near term, Kilroy said that Intel’s new generation of Atom processor, dubbed Moorestown, is well-suited to establish a foothold for Intel in forthcoming tablets from other computer makers.

“It’s a broader market than just Apple,” he said.

“Wait until Computex and I think you’re going to see that there’s an industry out there that’s got an appetite to go play and there will be certainly a good opportunity for us with our partners to participate as well,” said Kilroy, referring to the Computex trade show in Taipei in June.

Reporting by Alexei Oreskovic, editing by Bernard Orr