FBR Capital’s Craig Berger this morning takes aim at Intel’s (INTC) “Ultrabook,” the concept laptop that the company has enlisted its many hardware partners to produce, and which it promotes as the future of the notebook computer. The devices are starting to hit the market this quarter, but the big Ultrabook push is expected to come next year with the advent of Intel’s “Ivy Bridge” 22-nanometer microprocessors, and Microsoft’s (MSFT) Windows 8 operating system.
Berger’s note was prepared with input from Anand Lal Shimpi, the founder of Anandtech.
Intel reports Q3 earnings tomorrow afternoon, which may provide some new information about how the Ultrabook is proceeding.
Berger’s overall conclusion is that “Intel will push Ultrabooks to eventually become the mainstream notebook of choice for PC makers by 2016,” with just 15% “penetration” of the market in 2013. And he thinks the term Ultrabook will come to comprise not just traditional notebooks but also tablets and hybrids of the two.
Berger also thinks Intel’s arch rival, ARM Holdings (ARMH), will fail to gain more than 15% share of notebook computers because of the lack of support for legacy Windows applications running on the ARM instruction set.
Berger’s a semiconductor analyst, and so his main concern today is less the form factor itself and more the implications for chip makers. He sees both Marvell Technology Group (MRVL) and LSI (LSI) facing pressure on sales of their hard disk drive controller parts as solid-state disks become more prevalent in the Ultrabook devices.
Atmel (ATML) and Cypress Semiconductor (CY) should get a boost to their touch controller chips, he thinks.
And “Nvidia (NVDA), Texas Instruments (TXN), and Freescale Semiconductor (FSL) are not as likely to participate in the notebook PC market with ARM-based processors given Intel�s efforts to reduce power consumption, extend battery life, and race down the process technology curve to stay ahead of foundry-based ARM processor production.”
Overall, chip stocks are “cyclically bottoming and likely to run higher into year-end,” writes Berger.
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