Intel Gets a Jump in the Notebook Market With Its New Chips

Markets Motley Fool

Intel (NASDAQ: INTC) has been taking a lot of heat from Advanced Micro Devices (NASDAQ: AMD) in the CPU (central processing unit) space. AMD's Ryzen CPUs have taken the market by storm and, according to at least one look at the market, have helped it snatch market share from Chipzilla, but Intel's latest move clearly indicates that it wants to put the brakes on AMD's juggernaut.

Continue Reading Below

Intel's latest salvo

Intel recently unveiled the first batch of its 8th generation Core chips aimed at the personal computer market. The first wave of Intel's chips, originally code-named Kaby Lake Refresh, are meant for the notebook PC market that includes laptops, convertibles, and 2-in-1 computers that can also be used as tablets.

Intel has made a smart move by attacking this avenue before revealing its desktop-PC-centric chips as notebook chip sales have been crucial to its growth lately. For instance, the chipmaker's notebook chip shipments were up 14% year over year during the latest quarter, while average selling prices had increased 6%.

The impressive growth in Intel's notebook segment can be attributed to the lack of any potent competitor so far. Rival AMD is yet to release its Ryzen CPUs for the mobile platform. AMD's Ryzen Mobile and mobile Ryzen PRO chips, aimed at the consumer and the professional notebook markets, respectively, will see the light of the day only by the first half of 2018. By comparison, Intel's mobile chips are already on the market.

AMD believes that its revenue opportunity could increase by $10 billion once its mobile chips are on the market. Therefore, Intel has made the right move by going notebook-first as it can hurt AMD's dreams by moving early into this area with a chip platform that packs more power than its previous generation.

Continue Reading Below

Intel claims that its new chips can perform 40% faster than the previous ones, thanks to two additional cores and improved circuitry. More importantly, several OEMs (original equipment manufacturers) have already bought into Intel's new chips.

Intel seems to have strong OEM support

Intel's new chips can accelerate its sales substantially given the massive upgrade opportunity present in the notebook space. The company's  estimates suggest there are more than 450 million devices on the market that are over 5 years old.

Intel claims the 8th generation chips can deliver twice the performance gains as compared to a five-year-old PC. So, it isn't surprising to see why OEMs are flocking to the chipmaker.

In fact, Intel claims that its new notebook chips will power more than 145 designs. New devices based on this platform will start hitting the market from September. Acer, for instance, has already announced a new gaming laptop based on Intel's 8th generation chip, while Samsung is going to unveil a new notebook family based on the new processors in September.

More importantly, notebooks and mobile workstations will account for 40.4% of the personal computing device market by 2021, per estimates from IDC. By comparison, these devices accounted for 36% of PC sales last year.

IDC's estimates suggest that the desktop PC market will shrink below 90 million units in 2021, compared to last year's shipments of over 103 million. By comparison, notebook shipments could increase by almost 7 million units over the same period.

So it's not surprising Intel has decided to attack the notebook market first with its 8th generation chips.

10 stocks we like better than Intel
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Intel wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 1, 2017

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.