Intel is finally getting on track with wireless and embedded products, and should generate half its revenue growth next year from new product lines, according to a new analyst report.
Ross Seymore of Deutsche Bank Equity Research says in a new client note that he expects Intel to generate $4bn in additional revenue in 2013, and that $2bn of this will come from chips outside its traditional x86 processor markets, mainly PCs and servers. In particular, the newer offerings in embedded, wireless and NAND flash memory will be important.
‘Intel has dramatically outperformed its competition on revenue growth and/or profitability from 2008-2012 and is poised to extend these gains in 2013,’ writes Seymore. ‘These segments have the potential to generate about 50% of the $4bn revenue growth implied in our 2013 estimates, leaving us more confident in upside potential and Intel’s share price.’
The wireless and mobile business is currently worth $2bn in revenues, and is forecast by Deutsche to grow by more than 50% next year. The Intelligent Systems Group, which contains embedded products, should also reach $2bn in 2012, having doubled in size since 2007, while the NAND unit has trebled since 2008.
However, there are still plenty of risks ahead for Intel. As Seymore points out, the optimistic forecasts rely on new sources of growth not being offset more than anticipated by PC slowdown or by overall price depression.