Intel Corporation (INTC) Should Focus More On PC Business: Trip Chowdhry

Lack of innovation on the PC side of the business is what is hurting Intel Corporation (NASDAQ:INTC), affirms Trip Chowdhry, Managing Director at Global Equities Research. Despite a slowdown in the Pc business, the giant chip maker was able to report impressive first-quarter earnings that were slightly above what was posted last year same period. During an interview with CNBC, Chowdhry reiterated that the PC business remains a 200 million unit business that Intel should focus more on, instead of shifting attention to the mobile business.

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The ongoing weakness in the personal computer market has been attributed to people remaining uninterested in buying PCs opting for tablets and smartphones. The PC business continues to account a huge portion of the company’s revenues raising concerns whether Intel will be able to sustain its profit margins should the weakness persist.

“Intel Corporation (NASDAQ:INTC) has done a very poor job when it comes to innovating on the desktop side; somehow they have missed the whole vision of what desktop computing is all about. They have merged laptops and desktops today Intel is treating the desktop as a second class citizen. It is still a 200 million units business and they need to really optimize laptops for power and desktop for performance,” said Mr. Chowdhry.

Chowdhry believes Intel Corporation (NASDAQ:INTC) should not focus more on developing chips for the mobile business as it is not a high margin business compared to the PC business. Intel was bashed by the Street for entering the mobile market quite late after other chip makers had accrued a sizeable amount of market share.

“I would really like Intel to exit the mobile market because this is not a space in which they can really do well. The high-profit business continues to be desktop; they have totally ignored that desktops need innovation, and it is a 200 million unit opportunity,” said Mr. Chowdhry.

Intel Corporation (NASDAQ:INTC) hope of offsetting the ongoing weaknesses in the PC markets could on the other hand lie on the sale of chips for data centers. A business that has continued to grow as more business continue to embrace the cloud. The chip giant is confident that the data center business could one day account for a huge portion of its total revenues.

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