Miami, FL - November 27, 2012 (www.investorideas.com newswire) EmergingGrowth.com, a leading digital financial media company, Comments on Intel Corp (NASDAQ: INTC) Qualcomm Inc., (NASDAQ: QCOM). Discussion also pertains to Nvidia, (NASDAQ: NVDA), Hewlet-Packard (NYSE: HPQ), Dell (NASDAQ: DELL), Advanced Micro Devices (NYSE: AMD) and Apple Corp (NASDAQ: AAPL).
Intel (NASDAQ: INTC) stock has taken a beating lately. The corporation, a victim of lethargic computer sales, is rushing to get its chips into the smartphone market. Experts predict that those efforts will not help the company for at least the next 18 months, which led to shares dipping to their lowest level in a year. Needless to say investor confidence has been badly shaken. Computer sales generate the majority of Intel's revenue. It's a mystery as to why the company has taken so long to jump into the smartphone business. Chipmaker competitor Qualcomm (NASDAQ: QCOM), which also relies heavily on PC sales, has already made deep inroads into the smartphone arena. Qualcomm has been able to offset slipping personal computer sales with a growing smartphone business.
Computer sales have been the victim of a slow economy and increased use of handheld devices such as tablets and smartphones. Companies are hoping that the holidays will ignite sluggish sales. The general consensus is that the death knell of the personal computer is not about to happen anytime soon. Tablets and smartphones can do some of the same things that computers can do, but they cannot take the place of a PC; at least not today. The question is how long will it take before computer sales regain some semblance of normality? And then, where does this leave Intel?
The company's third quarter actually came in higher than expected, but weak Q4 projections and virtually nothing on 2013 sales have spooked an already jumpy market. Investors have to be questioning whether the company can reinvent itself in time or do Qualcomm and Nvidia (NASDAQ: NVDA) have too big a lead in the market. Intel appears to be headed in the same direction as Hewlet-Packard (NYSE: HPQ) and Dell (NASDAQ: DELL), tech leviathans that have taken a beating because they were unable to anticipate market trends and adapt to them. Intel's CEO, Paul Otellini chalked third quarter results up to “a continuing tough economic environment.” Two thirds of Intel's business is from PC sales, so it is no wonder the tech giant is sliding a bit now. Still things could be worse. Foremost rival Advanced Micro Devices (NYSE: AMD) has had a tougher go of it than Intel. Sales have plummeted and the company's stock has lost over 50 percent of its value this year, trading last week at a little over $2 a share. It is predicted that even the likes of mega corporation Apple (NASDAQ: AAPL) will be affected by the PC slide.
Some analysts remain optimistic about Intel's prospects for the long-term. They point to the fact that Intel is aggressively making a play to get into smartphones. There is little doubt that the company will eventually become successful again. The possibility is there that Intel will come up with the next brilliant chip that no hand held device can do without, but until then, Intel finds itself in a position that it must either recover from or at least keep its head above water. Intel has been through a few tough times in the past and has not given up. It should be noted that the stock is also extremely shareholder friendly, nearly always paying dividends to its investors. By the numbers, Intel reported third quarter revenue of $13.5 billion, down five percent from the same period last year. Net income fell 14 percent to $3 billion. Analysts point out that Intel is the largest semiconductor business in the world, with a hefty 15.9 percent market share in 2011. There are as many reasons to buy into Intel as there are to be wary. Intel has a proven track record. The bottoming out of the personal computer sales will not put the company out of business. On the other hand, Intel should have been looking at other options, such as the smartphone market, long before it started. Diversification will save and enhance Intel in the end. If you are willing to ride it out, this will be a good investment for the long-term, but not the short-term. Intel can and will thrive in a smartphone world because it wants to.
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