The PC market has been in decline for years. It is a slide that seems to be terminal, meaning the home computer is becoming a niche device. For company's who grew on the popularity of PC, the changing market presents a major challenge. Intel is one of the biggest names on the market, but the company has announced it is changing focus to become a “data center-first” brand.
Intel is basing its strategic shift on its forecast for the PC market. The company projects further decline in PC sales, so much so that it will be its smallest earning business within five years. With this changes, Intel will give its newest manufacturing technologies to its server division as opposed to consumer PC.
That does not mean the company is abandoning the PC market entirely. Instead, Intel will not give its newest technology to PCs like it has before. At its annual investor day, the company presented a slide showing total available market (TAM) for its PC CPU market. The projection showed the business is around $30 billion, which is less than half the data center business.
Intel's data center chief, Diane Bryant, described the new strategy as a “big deal”. The company will now push its premium lines directly to cloud providers and data centers primarily and PC later.
“Each of the functional groups inside of Intel look at their business and their investments and their strategies, in the context of making the data center a priority,” Bryant said. “And that includes being first to launch on a next-generation process technology node, and that's a big deal.”
Intel in the PC market
Of course, Intel is a major partner of Microsoft's and its chips are found in the majority of Windows 10 PCs. While the company is changing its focus, PC will still get new chips and technology. The difference is that the PCs will get the tech later, although customers may not really notice at all.
That remains to be seen, but it is clear that Intel still values its PC business. Indeed, the company points out that it has grown profits in PC by 30 percent even though the market is in decline. Core i7 processors have helped to drive that growth and are at an all-time high in the company's overall CPU sales.