Intel's bet on Windows 8 'convertibles' iffy, say analysts
The chipmaker is betting pretty heavily on Windows 8 convertible designs to rescue the PC. But analysts say they don't see a lot of designs yet that could turn things around.
Intel is betting a chunk of its PC future on so-called convertibles. So far, financial analysts aren't convinced these are designs that will win the day.
Newfangled laptops that perform mechanical acrobatics to convert to tablet mode, like Lenovo's Yoga convertible and Dell's XPS 12, aren't impressive enough yet to revive PC-market doldrums, according to a growing chorus of financial analysts who follow Intel.
On Thursday, Intel CEO Paul Otellini, speaking during an earnings conference call, tried to depict convertible PC designs as the best of both worlds: the laptop and the tablet. In essence, he said laptop convertibles can thwart the tablet onslaught from Apple, Google, Samsung, and Amazon.
Analysts aren't so sure -- at least not with the current crop of systems.
Wait-and-see story: "On the PC side, [Intel] is exposed to a slower replacement cycle and mobile cannibalization as Win 8 and ultrabooks have underwhelmed. We believe its vision of a computing ecosystem moving to a convertible PC/tablet device is a 'wait and see' story." --Doug Freedman, RBC Capital Markets, in a research note posted today.
Convertibles not well designed: "The convertible products we have seen so far do not appear to be well designed." --Gus Richard, Piper Jaffray, writing today about how Intel-based convertible laptops impact Intel's earnings.
Uninspired designs at CES: "The [Intel-based] x86 designs we played with were relatively uninspired (thick, clumsy, unrefined), and price points remain high (~$1K and above)." --Chris Whitmore, Deutsche Bank Equity Research, writing recently about his take-away from CES.
Incrementally encouraged: A Citibank research note posted today titled "INTC: A Tough Pill to Swallow for Now" actually had one of the more upbeat takes on convertibles, though it was tempered by a cautious optimism. "We concur with Intel's view that a slew of new touch-based devices combined with a potentially improving macro environment and an aging installed base could conspire to drive such above seasonal growth...That said, there is sufficient uncertainty to keep us on the sidelines this early in 2013."
Part of the problem is that some current Windows 8 convertible-laptop designs are hampered by less-than-well-conceived mechanisms that flip or swivel the laptop's screen into tablet mode. That's the root of the "clumsy" and "not well designed" comments.
Also, once in tablet mode, some convertible designs become in effect a thick, heavy tablet because the screen sits on top of the keyboard which, in turn, sits on top of the laptop's main chassis.
On the other hand, so-called detachables, like HP's Envy x2 and Microsoft's Surface, tend to be more elegant designs because the keyboard can be detached and the systems can then function as a light, thin, standalone tablet.
