UBS Securities’s Uche Orji, who has a Buy rating on Intel (INTC) shares and a $34 price target, writes today that Intel’s presentations at the Mobile World Congress yesterday, in Barcelona, Spain, suggest the company can make headway this year with both mobile phone deals and with “ultrabook” laptops it is pushing hardware OEMs to produce.
On the phone side, the evolution of Intel’s “Atom” processor line for smartphones shows an expanding strategy of both high-end and low-end chips that Intel is fashioning by accelerating its chip roadmap.
Intel announced its 22nm Z2580 Atom for smartphones for 2013 that will offer 2x processor and graphics performance along with new LTE/faster HSPA modems. In addition, Intel announced a Medfield derivative for mass-market smartphones, enabling sub-$150 unsubsidized pricing, suggesting sub-$20 processor + modem. We expect Intel to focus this mass-market solution on customers that also buy its premium products in order to limit gross margin dilution.
Similar remarks about Intel’s process technology were made yesterday by Raymond James’s Hans Mosesmann.
As far as ultrabooks are concerned, Intel has had a three-week delay in its production of the 22-nanometer “Ivy Bridge” processsor, Orji notes, thanks to the complexity of brining up full production in three different fabs.
However, the company is seeing greater demand at this point in the chip’s roll-out than Intel did at the same point last year for the “Sandy Bridge” processor.
He thinks that bodes well for Intel’s ability to help hardware partners sell low-cost ultrabooks later this year, reiterating some remarks he made in a note on the subject yesterday.
Intel shares today are up 34 cents, or 1.3%, at $27.23.
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