There are many reasons for Intel’s current woes such as the rise of smartphones, PC’s being replaced with tablets and other devices and the Osborne effect. However, Intel is already looking to the future and has announced significant investment in new technology.
Gloomy Outlook for 2016
Most indicators show that Intel is going to struggle in 2016. Its hardware is not coping with the changes in the global market and people are waiting for new technology. As a result they are putting off buying new PC. However, new technology takes time before it becomes the best buy on the market.
Despite the slowdown, people and companies will continue to buy desktops and laptops according to their needs. This is a key factor as they are still the majority of Intel’s business. In order to boost sales, there needs to be significant improvements and innovations. At present, most computers bought in the last two or three years can cope just fine with current demands, making the purchase of a new one unnecessary.
Investments in future technology and improvement in 2018
Investment in future technology such as 10 nm silicon, IoT, 3D XPoint, super-smart phones and wearables are essential to the future of Intel. In response to this, it is investing around $30 billion a year in new technologies. However, the Osborne effect, which refers to accidental consequences of pre-announcing a new technology, is still having a negative impact on sales of PC’s.
While the impact on Intel is not huge, people are still postponing decisions on buying replacement computers. For many uses the computer will maintain its dominant position, but going forward, that will largely depend on hardware and software development factors. New innovations to the boring home computer, expected by 2018, should move it more in the smartphone direction and the replacement of a single-purpose processor with a general purpose processor has the potential to be revolutionary. If Intel can provide technology for the masses, and if the economy strengthens, then late 2017 or 2018 could be the turning point for this tech giant.