Intel Corporation (INTC) To Lose $2 Billion Data Center Profits Because of Power Architecture and Qualcomm Chips?


In an article on Fool, it was reported that Intel Corporation (NASDAQ:INTC) is going to face an immense competition in server side business in the coming days. Intel Corporation (NASDAQ:INTC) has dominated the server chip making business. The company changed the business dynamics and pushed out micro-devices from the industry. It has earned huge profits from its server based customized hardware and software solution which comes embedded in chips. But the source thinks that good days are about to end for Intel Corporation (NASDAQ:INTC) because it is being outplayed by a number of players like Qualcomm and IBM. Qualcomm and ARM are joining hands to roll out ARM-based server side processors. This will grab the low end of the market.

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Intel Corporation (NASDAQ:INTC) will also face problems in the high-end of the market where IBM and Nvidia have joined hands to launch Power architecture. The source thinks that Intel Corporation (NASDAQ:INTC) has still a lot of advantages over the said competitors because of a number of reasons. Intel Corporation (NASDAQ:INTC) has in-house processing power of chips, server side chips and hardware, which no other company has. Intel’s x86 architecture has long been the juggernaut of the server side hardware business in the Enterprise and Qualcomm and IBM will have to run put massive effort to move Intel Corporation (NASDAQ:INTC) from its position.

Intel Corporation (NASDAQ:INTC) needs massive reinvigorating in the chip and PC business to tackle the upcoming challenges. Intel Corporation (NASDAQ:INTC) has the biggest problem in the form of balance between operating margins and operating profits in the data center business. The source said that if the company takes margins to the level of 2009, around $2 billion will be lost.

As of June 30, 2014, Ken Fisher’s Fisher Asset Management owns over 18 million shares in Intel Corporation (NASDAQ:INTC).

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