SAN FRANCISCO — Intel will not let a good crisis go to waste.þþThe company, the world’s largest maker of semiconductors, announced on Monday that its revenue this quarter would fall to $13.7 billion, from $14.7 billion, because floods in Thailand had sharply cut the world’s supply of disk drives. Without the drives, manufacturers will make fewer personal computers and computer servers, which means fewer semiconductors will be needed.þþWhile clearly bad news for Intel in the short run, the shortage of both components and finished personal computers could prove an opportunity for Intel as it tries to fight the onslaught of tablet computers, particularly Apple’s iPad. It has been trying to build a business in the emerging category of ultrabook computers or ultrathins, which do not use hard drives.þþAlthough the impact of the flooding on the hard drive industry has been known since October, PC makers have told Intel over the last two weeks that they would need fewer chips.þþ“This does not change our view, that demand for personal computers and servers is healthy and growing,” said Stacy J. Smith, Intel’s chief financial officer. Constraints caused by the lack of drives will continue through the first quarter of 2012, Mr. Smith said. Last week, IHS iSuppli, a technology industry research firm, said that it expected PC shipments to expand in 2012 by only 6.8 percent, down from its previous forecast of 9.5 percent.þþUltrabooks, pioneered by Apple with its MacBook Air, are laptops less than 0.8 inch thick, typically with long battery lives. They are, in a sense, like tablets with an attached keyboard.þþUnlike a PC, they usually have solid-state drives that use flash memory chips, not mechanical hard drives. While ultrabooks weigh and cost slightly more than tablets, the larger screen and the familiar keyboard make them potentially attractive alternatives to tablets. Intel and others are investing in research to make touch screens, now standard on tablets, a feature of ultrabooks as well.þþSolid-state drives are still readily available from Intel and others. Typically, these devices cost five to 10 times as much as disk drives. But solid-state drives consume less power and take up less space, making them desirable in both ultrabooks and tablets.þþWith hard drive makers hurting, “we’ll be using this as an opportunity” to increase sales of solid-state drives, Mr. Smith told analysts. He did not announce any immediate plans to increase investment or production in solid-state drives or components for ultrabooks, however.þþStill, Intel and other companies are likely to benefit from the shortage of disk drives. “If Intel is given lemons, it will make lemonade. It’s a chance to have an even broader Intel platform” of both storage and processor, said Rob Enderle, an industry analyst in San Jose, Calif. “You’ll see people pushing solid state quite a bit now, Samsung, Intel and others,” he said.þþSo far, the best-selling ultrabook is Apple’s Air, which uses Intel chips but not an Intel solid-state drive. Alternatives from Acer, Asus, Toshiba and Lenovo, all using Intel processors, have recently appeared, and Intel is counting on a big push into the market next year. Apple’s least expensive Air costs about $1,000, while other ultrabooks can cost $870 to $1,200.þþIn August, Intel announced a $300 million fund for ultrabooks, primarily to finance research to produce lower-cost chassis and touch screens. Last week, Intel sponsored a series of meetings in Taiwan between component makers and the Taiwanese manufacturers who make computers for companies like Hewlett-Packard and Dell. Around the end of this year, Intel is expected to produce a chip called Ivy Bridge specifically for ultrabooks.þþManufacturers have been complaining about the high prices Intel charges for its processors, but Intel in unlikely to give up much on pricing. On Monday, Intel said that, aside from hurting revenue, the hard disk drive shortfall would narrow its gross profit margins to 64.5 percent, from 65 percent. In the short term, Intel will probably want to recover that.þþEven as increased production and more research will probably lower the relative cost of solid-state drives, the way people use computers is changing the need for hard drives. For a long time, people wanted lots of storage for keeping things like music and pictures. Digital cameras and digital music increased demand.þþIncreasingly these things are stored in the cloud — in remote data centers — and reached over the Internet through machines that consumers want to be lightweight, portable and with long battery lives. External hard drives are also available, and if needed, they can be hooked up to ultrabooks for more memory.þþ“Lots of people buy tablets, find they can’t do as much, and switch over to a MacBook Air,” Mr. Enderle said. More ultrabook producers will increase the alternatives to tablets, he said, as will the absence of hard disk drive producers for regular laptops. “It helps if the lower-priced product isn’t around,” he said.
Source: NY Times
