Tuesday, May 11, 2010 - Intel Corporation (INTC) is a semiconductor chip maker, which develops advanced integrated digital technology products, mainly integrated circuits, for industries such as computing and communications.
Intel Corp (INTC) expects to double its earnings growth in the next few years and on Tuesday raised its long-term margin outlook, as the world's top microchip maker spreads its chips beyond PCs to gadgets like smartphones and televisions.
Chief Executive, Paul Otellini, told investors and analysts, today, that Intel is eager to establish a footprint in fast-growing -- but intensely competitive -- markets, diversifying beyond a PC market it now dominates.
We are poised to take smart computing into whole new segments where it hasn't been before," Otellini said at the company's annual investor meeting at Intel's Santa Clara, California, headquarters.
The company also said it remains "highly confident" that it will achieve its financial goals for the current quarter, which should see double-digit annual growth in earnings per share and revenue in the next few years, despite rising concerns about European economies amid Greece's financial crisis.
"So we're essentially committing to forecasting to double the growth rate of earnings, and double-digit growth rate on revenue for the company as a result of all these initiatives," Otellini said.
Intel said it now viewed its "normal" gross margin target level for the next few years to be within the range of 55 to 65 percent of revenue. Intel had previously defined a range of 50 to 60 percent as its typical range, though it delivered a 63.4 percent gross margin in the first quarter.
His outlook is bolstered by continued growth in Intel's traditional PC market, with desktop machines projected to grow at an average annual rate of 2.4 percent through 2014 and notebook PC shipments growing at an annual rate of 22 percent. Growth in chips for tablets is projected to be between 73 percent and 88 percent, he estimated.
“Tablets like netbooks are additive," Otellini said. "They’re a new usage model for computing and they are probably good for Intel long-term, but I don’t believe they’ll take market share away from other devices."
Meanwhile, the company is shifting from being only a PC chip company to adding software platforms. Otellini said software professionals are now 22 percent of Intel's work force, not counting IT and manufacturing.
Intel, which makes the microprocessors used in more than three-quarters of the world's PCs, gave investors a bullish assessment for the PC market in coming years, even as consumers increasingly snap up new breeds of gadgets like Web-connected smartphones and tablets like Apple Inc's (AAPL) recently released iPad.
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