Facebook's IPO Debacle, Day 3: Un-Friended and Dis-Liked on Wall…
Former Olympic Rower Turned to Minimalism to Pay Down $82,000 in Debt
In an effort to keep bottom-line growth alive, Intel is trying (again) to move into the mobile phone market. Speaking from the Consumer Electronics Show in Las Vegas, the Pentium parent's CEO, Paul Otellini, told Bloomberg that Intel is focused on "where we think phones are going, not where they are today." Last year, Otellini put to rest his predecessor's $5 billion, six-year effort to produce mobile-phone chips designed to run the communications features of cellular phones. Now, the Intel CEO is taking a different approach to the new marketplace, designing chips for phones that can surf the web and master mobile video and music. The goal for the new chip is to provide increased processing power while exerting less electricity.
In the first half of 2008, Intel will be unveiling its package of mobile chips. A successful shift toward this technology could be a boon for the company, as mobile handsets currently outsell personal computers by a 4-to-1 margin.
Intel is in need of a new project, as PC sales have been slowing, curbing the company's revenue growth. A Bloomberg survey estimates that Intel revenue growth will pull back to 6.1% in 2009, down from an average growth rate of 13% from 2003 through 2006, as the Centrino chip dominated the laptop market.
The stock could use a pick-me-up as well; INTC has dropped more than 18% in the last 30 days and has given back 2.4% today. Will the second time be the charm for Intel's attempt to crack the mobile-phone market? Or will it be a case that the marketplace fooled Intel once (shame on it); fooled Intel twice (shame on Intel!)? Either way, it will take months if not years for any positive repercussions from these new chips to trickle down to the bottom line. Patience could be a virtue for long-term Intel investors, but be careful in case Otellini's new chips quickly become old news.
Beth Gaston Moon is an analyst at Schaeffer's Investment Research.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
