Intel Corporation (INTC): Is This Company Merely Trying To Put Up A Brave Face?

Microsoft’s smart move

At the same time, one other company that has really felt the heat from declining PC sales is Redmond-based Microsoft. The company, that already has a long and successful partnership with Intel, has faced lackluster demand for its much-anticipated Windows 8 operating system. But, the one area where Microsoft seems to have made a smart move lies in its current partnership with Finnish smartphone giant Nokia Corporation (ADR) (NYSE:NOK). That’s because sales of the latter’s Lumia line of smartphones that feature Microsoft Corporation (NASDAQ:MSFT)’s Windows operating system seem to have picked up of late, providing a steady and growing source of revenue. And most of these phones that run on Windows 8 are powered by Qualcomm-manufactured chips. In any case, Intel’s relationship with Microsoft Corporation (NASDAQ:MSFT) has certainly been put to the test with the latter’s recent announcement that its upcoming Xbox gaming console model will use chips made by longtime Intel rival Advanced Micro Devices, Inc. (NYSE:AMD).

The clouds simply refuse to go away

The chips are certainly way too down for Intel and I personally don’t have much hope for a turnaround in the second half of this year. Given that PC-based sales comprise a mammoth share of the company’s sales, it’s unlikely that its server chip sales figures will be able to offset the decline, as the company is claiming. At the same time, ultrabooks don’t inspire much hope, one because of their sky-high prices that make them unaffordable to many potential customers and two, because they are still much more cumbersome and heavy when compared to modern-day tablets.

On the mobile processor front, Qualcomm’s early headstart is already half the battle won against Intel. In any case, it’ll be quite some time before the latter’s Clover Trail+ processors start showing up in devices. Having said all that, Intel Corporation (NASDAQ:INTC) has the money as well as the technology to surge ahead and this is one company that truly pays handsome dividends. I would hold on to Intel for now and wait for some more time to see where the situation leads to. However, an early recovery may still be a remote possibility.

The article Is This Company Merely Trying To Put Up A Brave Face? originally appeared on Fool.com is written by Subhadeep Ghose.

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