Intel 2Q13 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“t’s great to have a chance to speak to you all on my first earnings call as a CEO. The last two months have been exciting for me. I spend the majority of my time meeting with customers, employ”

“ntel was slow to respond to ultramobile PC trends. The importance of that can be seen in the current market dynamics. The traditional PC market segment is down from our expectations at the beginning of the year. While ultramobile devices like tablets are up.”

“In addition to the organizational changes, we have made several strategy and priority changes that will allow us to focus and win in that environment. These changes will drive a greater on Atom-based products, bringing the full way of our process and architectural leadership to the ATOM family.

We will move ATOM even faster to our leading edge silicon technology and focused on the SSC integration of key components like graphics, communication and other devices. This does not means we will lessen the value or leadership of our core product, but rather make ATOM an equal player in technology of leadership for the ultramobile space. ”

“As expected, inventory levels across the worldwide PC supply chain grew slightly as customers begin building Haswell based PCs but inventory levels are still being managed well below historical averages based on uncertainty heading into the back half of the year. ”

“he overall PC market segment for 2013 is expected to be weaker than we forecasted at the beginning of the year. Our expectation is now that revenue will be approximately flat to last year. As a result, our gross margin forecast for the year is now 59% versus the prior forecast of 60%.”

“We have an unprecedented line up of products coming to market in the second half of this year across all the segments of our business. Haswell delivers a historical increase in battery life across a diverse line up of ultramobile form factors by two-in-one convertibles, tablets and other touch enabled devices.”

“The fact that X86 works on both Android and Windows is a real advantage to our OEM base. They look at that and say that they can have one architectural design, one set of products and use both operating systems. So, it’s a unique feature that we are able to provide. ”

“I think the things that were positive for me is that our customers specially they want Intel to get into this expanded ultramobile market. They are looking for Intel to the stronger and have a better and more capable product might up there and they’re excited about the products that we have coming there, Haswell and Baytrail. So I’d say the key message that they’ve been giving us was, we really want you there, we see the products coming, we want even more and we want a faster line up following those”

“ou have to remember that even when you signed up a foundry customer. It’s a team that 24 sometimes even longer 30 months before that foundry customer is able to start producing products especially when they move from one foundry to another.”

“you kind of want to crawl, walk, run not necessarily because that’s what we should do in order to manage it, it is more you really want to make sure that the systems and the customer support models that you have are in place to handle the volume that you are really taking on. And since we haven’t been foundry business all – we want to go and make sure we really knew what we were doing”

“Haswell, has been not a single product launch. So, let me first take Haswell. We launched the Quad core products in the second quarter.

As we go into the third quarter, the Dual core products which go more into those lower price point region is actually going out to the market. So it’s a staggered launch which is a little bit different than we’ve done in some other products. So we’re just now really starting to see the ramp of Haswell into the customers hands.

So, I think it’s really way to early to say here is what Haswell is and you are just going to see as we move in to the second half in fan-less devices with Haswell as we move forward Bay Trail and 14 nanometer as we move in to next year well you can imagine will drive prices and battery life and the number of fan-less devices up even more”

“PCs specially with Baytrail are going to move down into this, let’s call $200 to $400 range is going to shift that market we believe as well. And that’s different than what’s been out over the last few years. So, you got favorite Haswell, you’ve got Baytrail coming in all of those things allowing devices that haven’t been allowed in the past with our design.”