Intel at IFA – evolving computing but quiet on smartphones

Intel held a characteristically demo-rich press conference at IFA on September 2nd. Intel formally announced the sixth generation of its Core series processors – based on the Skylake 14nm architecture. In addition it introduced its familiar three tier positioning to the Core M generation of lower power processors that it initially launched at IFA a year ago.

In a similarly structured speech to IFA 2014, Kirk Skaugen, SVP and GM of the Client Computing Group, gave a whistle-stop tour of the enhancements offered in the new generation of Core products. These now break into two series – the familiar Core i3, i5 and i7 and the professionally oriented Core vPro i3, i5 and i7. This naming convention also now applies to the Core M series. In total Intel is introducing 48 new processors that will support everything from compute sticks through to heavy duty workstations.

Intel estimates there are estimated to be more than a billion PCs over three years old and more than 500 million of those that are at least 5 years old. In comparison with a leading computer of 2010 the new Core series offers a 2.5x improvement in CPU power, a more than 30x improvement in graphics performance and a 3x improvement in battery performance.

Perhaps the key point of Intel’s launch is the confluence with Microsoft’s Windows 10 roll-out – an alignment of hardware and software upgrade that Kirk Skaugen described as occurring only once per decade. And it was clear that Intel and Microsoft have been working closely to mutually enhance the performance of each other’s elements. OEMs are jumping in with both feet eager not to miss the potential upgrade cycle that must be a consequence of the huge number of legacy PCs still in use.

When Counterpoint Research asked the ‘elephant-in-the-room’ question about Intel’s conspicuous absence from the smartphone market, Skaugen gave a less than convincing answer. He mentioned the Atom processor and its growth as a tablet compute platform as well as the growth of Chinese ODMs that are increasingly using Intel processors. He mentioned that some ODMs are investigating using Core M processors in phablets. This doesn’t surprise us. However what we expected but didn’t get was a longer-term perspective in which smartphones and computers become even more closely aligned and in which Intel might reasonably expect to have a more prominent position. Tellingly Acer announced a Windows 10 based smartphone – the Jade Primo – however it is powered by a Qualcomm Snapdragon 808 processor. And while Asus announced a whole slew of Zen Phone smartphones based on the Intel Atom processor – all are Android rather than Windows; not an issue for Intel but the devices don’t support a long-range vision of a PC : Smartphone convergence.

Overall we can see how Intel is set to continue dominating the PC (and Mac) market. A market that will develop rapidly thanks to Windows 10, the potential for a wave of upgrades of legacy PCs in the next two years and the form factor innovation that is finally making PCs desirable once again. The flip side is the pure tablet market is likely to remain flat at best.