Could Intel Be the Surprise Windows 8 Winner? (MSFT, ARMH, INTC, AMD, AAPL, FNSR, GOOG)
Since the day Microsoft (MSFT) announced its upcoming Windows 8 operating system would be compatible with ARM Holdings (ARMH) processor technology, Wall Street analysts have predicted it spelled bad news for Intel (INTC) and Advanced Micro Devices (AMD). Next Inning editor, Paul McWilliams, whose Next Inning model portfolio has returned close to 300% since inception, disagrees.
In October, McWilliams tipped investors to the other side of the Windows 8 story. He acknowledged that opening the door of Windows 8 to ARM-based solutions will win designs for ARM in previously untapped markets, but told Next Inning readers what will prove more important is how the move will allow Intel to compete more effectively in the mobile smartphone and tablet markets where it had virtually zero market share when entering 2012. “As Microsoft optimizes Windows 8 so it can address the tablet market and include ARM core processors, Intel will have the advantage of six million existing software programs designed specifically to run on the Windows operating system using an x86 processor.”
This week, McWilliams’ quarterly Intel State of Tech report detailed the opportunities and challenges for both ARM and Intel as Microsoft moves forward with its Windows on ARM (WoA) initiative. McWilliams believes the WoA tradeoff between longer battery life and more computing power, while an important consideration for tablets, may prove inadequate for notebook and irrelevant for desktop applications. Intel maintains its position as processor performance leader in PCs, and McWilliams believes the tipping point has arrived where Intel will be able to begin demonstrating cost/performance leadership for chips powering tablets and smartphones, where Intel currently has little presence.
“It’s too early to fully define the bottom line, but I think this move will do more to broaden the x86’s reach than it will threaten the x86 with competition from ARM,” McWilliams said. “Right now, I wouldn’t dream of settling for a WoA product unless it is sold at a very steep discount to x86 versions and I don’t think time will prove me to be the exception.” Next Inning free trial subscribers will have immediate access to McWilliams’ comments on where he believes Intel is headed next. In addition to this, you’ll get full access to his coverage on Apple’s (AAPL) newest iPad.
McWilliams has kept Next Inning readers ahead of the curve for years. In mid-2009 when the Finisar (FNSR) was below $5, he let readers in on what he saw a strong growth trajectory for the fiber optics company. By early 2011, Finisar peaked above $40. More recently he broke the news of how Google (GOOG) is investing in the Midwest and putting in place the pieces for a significant content delivery play. McWilliams also kept Apple investors apprised of its growing stash of cash and options for what to do with the money, months before Apple executives officially acknowledged the issue and mainstream news sources finally jumped on the bandwagon.
McWilliams always has strong opinions when it comes to Intel. Sometimes he is cautious like in May 2008 when Intel was trading in the mid-$20s, he suggested cutting exposure and predicted the price could fall as low as $12 later that year. Later, when Intel bottomed at $12 and change, McWilliams advised Next Inning readers it was time to buy and for every quarter since Q1 2009, McWilliams has predicted Intel’s quarterly results with uncanny accuracy and, at the same time, dispelled the Wall Street myths that Intel would fall as we entered what analysts called the “post PC era.”
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