Intel Vows to Recover From Stumbling

Intel has stumbled badly at a time when smaller rival AMD and others are picking up speed. It says it will regain its balance this year.

The company shocked the market last week with a revenue outlook that was behind Wall Street estimates by about US$3-billion. The weakness of the global economy only makes Intel’s challenges more difficult.

Intel is still the 300-pound gorilla in the market of CPUs, the brains of computers, and it says it has passed through the worst of a revamp under a new chief executive.

Intel CEO Pat Gelsinger
Intel CEO Pat Gelsinger

We stumbled, right? We lost share; we lost momentum. We think that stabilises this year

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“We stumbled, right? We lost share; we lost momentum. We think that stabilises this year,” CEO Pat Gelsinger told investors on a conference call.

Intel still dominates the markets for PC and server processing chips, with a market share greater than 70%, tech research firm IDC calculated. But that is down from more than 90% in those markets in 2017.

“Someone going from 1% to 13% is significant. It tells you that now there’s a viable second competitor in the server processor market, who has momentum and is gaining momentum,” said IDC analyst Shane Rau.

That competitor is AMD, which, under the leadership of CEO Lisa Su, has come back from the brink of bankruptcy and has been taking business away from Intel quarter after quarter. AMD’s market capitalisation is about the same as Intel’s, a sign of investor confidence in AMD’s growth prospects.

Chip glut

Rau said Intel and AMD would both face macroeconomic headwinds and challenges related to rolling out their newest chips, but that Intel also had the bigger issue of a chip glut to deal with. “I don’t think Intel is in a position yet to start recovering share” in the market, he said.

Customers of processors cannot launch products if new chip designs are late, and Intel has stumbled on delivering its latest data centre chip, code named Sapphire Rapids.

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“Sapphire Rapids was about two years late. And so, because of that, AMD has leapfrogged them,” said Bob O’Donnell of Technalysis Research.

Worse for Intel, the benchmarks published by the two companies show that AMD’s latest server chip outperforms Sapphire Rapids on “general purpose workloads”, according to Bernstein analyst Stacy Rasgon.

Intel has rising competition, too, as graphics chip maker Nvidia branches into central processors and former processor customers, including Apple and Amazon, design their own chips.

Gelsinger said that 2023 would be a year of stabilising then re-acceleration. Intel had taken some painful steps and now needed to execute on a good plan, he said. Some agree.

“Intel’s turnaround is taking some time, exacerbated by the economy, but I believe its plan is working,” said Glenn O’Donnell, analyst at Forrester Research. “It is delivering on new products and its manufacturing is ramping up with agreements from other chip makers to use Intel’s manufacturing capacity.”

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Investors, meanwhile, are looking for the next piece of evidence: AMD will report its results on Tuesday.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Intel to hike chip prices – more than 20% in some cases

Intel to hike chip prices

Intel has started informing customers of its plan to raise prices for many of its chip products due to rising costs, a move that the company had first hinted at in its first quarter earnings call on 28 April.

The price increases could come into effect in the spring (northern hemisphere autumn) and the percentage increases are likely to range from a minimal single-digit increase to more than 10% and 20% in some cases, Nikkei reported.

Intel to hike chip prices
FILE PHOTO: Intel’s logo is pictured during preparations at the CeBit computer fair, which will open its doors to the public on March 20, at the fairground in Hanover, Germany, March 19, 2017. REUTERS/Fabian Bimmer

While the price hikes have not yet been finalised yet, it could cover Intel’s flagship products such as CPUs for servers and laptop and desktop computers, as well as items including chips for Wi-Fi and other connectivity, the report said on Thursday.

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Intel’s move comes amid a supply-chain crisis triggered by the global pandemic that has deprived makers of PCs and smartphones to cars of computer chips needed to make their products

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Google, Qualcomm, Intel, Broadcom Terminate Huawei’s Android licences  —  What This Means

The trade war between the US and China means that Huawei Technologies Co. Ltd, a Chinese multinational telecommunications equipment and consumer electronics manufacturer, headquartered in Shenzhen, Guangdong, China is the latest victim.

Google has just announced it has cut off Huawei’s Android licence, a move which would have serious implications for the manufacturer’s smartphone business.

Global smartphone market share

We are complying with the order and reviewing the implications. For users of our services, Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices,”Google said in a statement which attributes the revocation of the licence to compliance with US government policy

What This Means

  • The short term implication of this is that Huawei will lose access to Android updates, which means that existing Huawei smartphones will not be able to receive any official Android OS updates going forward.

  • Huawei will only be able to use the open-source version of Android and will lose access to proprietary apps and services from Google.

  • While the Chinese manufacturer can still use the Android Open Source Project (AOSP) licence to develop its software, this licence however, does not encompass applications such as Gmail, YouTube, and the Chrome browser.

  • These applications require a commercial agreement with Google and are available to download through the Google Play Store. These are what Google has blocked.

Intel, Others Follow Suit With Google

  • Among the four chipmakers, Intel is Huawei’s primary supplier of chips used in its data centers.
  • Additionally, Intel also provides processors for Huawei’s Matebook series of laptops.
  • Qualcomm sells it Snapdragon SoCs for various entry-level devices like the Honor 8C as well as some network chips.
  • Qualcom also licenses aptX codec for Bluetooth audio to Huawei.
  • Meanwhile, Xilinx provides programmable chips for networking while Broadcom supplies packet switching chips for telecom equipment.

In all, there are more than 30 companies in the U.S. considered as “core suppliers” by the company, and all of them are likely to follow the same route.

Huawei would lose all that bar for green Android with this new development

What This Means For African Businesses

  • The implication of this move by Google is that African businesses and other western markets using Huawei products could lose access to YouTube, Gmail, Google Maps, Chrome, and other popular apps on their Android smartphones, which are the proprietary rights of Google. This could be devastating for users in the Western markets where Huawei operates.

  • However, it is still uncertain how Huawei adjust its platform to tackle this the suspension of its Android licence.

  • Huawei may opt to migrate its devices to its own proprietary operating system, which it confirmed it has been developing in case it loses access to Android.

  • However, moving to this new operating system would not affect China so much, because most Google applications are banned are already banned there and users have since adopted Chinese equivalents.

  • Huawei has greatly expanded its presence in the African market, with its devices proving extremely popular due to their lower prices and solid design.

  • However, regardless of whether Huawei decides to migrate to its backup OS or stay with an open-source version of Android, its Android licence suspension will have a significant impact on Huawei users in South Africa.

  • This termination may give rise to serious trust issues against the Chinese companies. American spy chiefs in a classified info hinted that “The Chinese government and Communist party pose the greatest long-term threat to US economic and national security. It’s important that US companies, universities, and trade organizations understand fully that threat.”
Image result for smartphone  African market share
Huawei Responds To The Ban

In a response, Huawei says 

Huawei has made substantial contributions to the development and growth of Android around the world. As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefitted both users and the industry.

Huawei will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally.

We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally.”

Charles Rapulu Udoh

Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

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