3 Ways Intel Corporations Upcoming Chip Could Boost the PC Biz

By Markets Fool.com

Image source: Intel.

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A little under two months ago, a leak from generally reliable website PC Watch leaked some details about microprocessor giant Intel's (NASDAQ: INTC) late 2017-to-2018 desktop and high-performance notebook processor family, known as Coffee Lake.

It's not entirely clear what enhancements Intel is making to Coffee Lake, but PC Watch did mention a couple of key tidbits. First, Coffee Lake is expected to be available in two-, four-, and six-core variants. Current Intel desktop processors only go up to four processor cores.

Additionally, Coffee Lake is expected to pack Intel's GT3e graphics, a substantial boost from the GT2 graphics that the company ships in its current desktop processors.

Although these tech specs are interesting in their own right, Intel wouldn't add cores and graphics unless it felt there were segments of these markets that found value in increased processor core counts and beefed-up graphics.

Here are three areas of the desktop personal computer market that could stand to benefit from these enhancements.

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Accelerating mini-PCs

At Intel's 2015 developer forum, the company hosted a presentation in which it talked up the growing popularity of so-called mini-PCs. According to the presentation, the market for mini-PCs is expected to grow from just shy of 6 million units annually to 8 million units by 2018.

The company even said that mini-PCs represented "one of the fastest growing segment[s] in desktops."

In the following slide, the company highlighted five different form factors, or types, of mini-PCs:

Image source: Intel.

The upcoming Coffee Lake chips should be suitable for the Mini-ITX and 5x5 form factors listed. The NUC, Mini Lake, and Compute Stick form factors are typically served by low power mobile chips, not high-performance mobile and desktop processors.

Indeed, the amount of computing power that Intel should be able to cram into those two form factors should go up by quite a lot. With six cores and beefier on-chip graphics, the Mini-STX systems should be much more capable of handling gaming workloads than current versions are now, for example.

This could make these form factors even more attractive to users who want a lot of performance but couldn't quite handle the sacrifices they'd have to make by using current-generation processors.

Beefing up gaming notebook computers

Another area where Coffee Lake should shine is in gaming-oriented notebooks. Current gaming notebooks are limited to quad-core processors usually paired with separate graphics processors.

Although the quad-core processors that gaming notebook manufacturers include in their systems are quite fast, it is possible to buy gaming desktops with six-, eight-, or even 10-core processors.

If there is significant demand from vendors of gaming-oriented laptop makers for six-core processors suitable for their highest-end systems -- and I would imagine that gaming notebook vendors would love that particular marketing point -- then it makes sense that Intel would craft products to serve those vendors' needs.

Faster, more efficient all-in-one computers

Intel has also talked at length about the growth opportunity in all-in-one desktop computers. The additional processor cores that Coffee Lake is expected to bring to the table should enable a significant performance increase, particularly for productivity workloads, such as video and audio encoding, as well as heavy multi-tasking use cases.

Additionally, although standalone graphics processors are possible in all-in-one form factors, particularly the larger screen ones, improved graphics built into the Coffee Lake chips should reduce the need for such standalone chips, enabling cheaper systems that draw less power and generate less heat.

How does Intel benefit from this?

Intel's job with respect to the personal computer market is twofold. The first is to build chips that enable system vendors to build more attractive products that will ultimately sell well in the market place. More performance is always a nice selling point, especially if it can be delivered in a compact form factor.

The next is to add enough value to its chips that system vendors and customers find it worthwhile to buy products higher up in Intel's product stack. Intel may very well be able to charge meaningfully more for a Coffee Lake desktop chip with six processor cores and GT3e graphics than it currently can for a quad-core processor with just GT2 graphics.

A boost in average selling prices, especially given that the personal-computer market itself isn't really growing, is a nice way for Intel to shore up its revenue here.

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Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.