by Jack Narcotta, Devices Analyst at Technology Business Research
Intel’s newest chipset – Skylake – shows that the stalwart chipmaker’s renowned “tick-tock” release schedule is no longer entirely about adhering to Moore’s Law. Numerous announcements in early September 2015 at renowned consumer electronics showcase Internationale Funkausstellung (IFA) by nearly every PC OEM of new Skylake-equipped PCs, compute sticks and tablets set highlight how the conversation is shifting to what tasks the devices will power, versus what processor is powering the device.
Intel intends for Skylake’s early release – less than eight months after its Broadwell predecessor – in tandem with the release of Windows 10 to rekindle demand in the PC market, particularly ahead of the traditional holiday purchasing season in calendar 4Q15. TBR believes the Skylake-Windows 10 combination will spur purchases from users with older Windows XP or Windows 7 PCs who deferred upgrading to Windows 8, but fail to generate the momentum necessary to reverse the PC market’s streak of year-to-year revenue decline. A surge in interest in PCs equipped with Skylake will lift unit shipments in calendar 4Q15, but the combination of the growing appeal of sub $300 PCs and increased longevity of midrange and premium models will hamper revenue growth well into 2016.
The myriad new device announcements at IFA illustrate PC vendors have embraced the shift promoted by Intel, and the upcoming slate of hardware releases will showcase the advanced voice-enabled controls and search capabilities, multimedia capabilities and power-saving features made possible by the Skylake-Windows 10 combination. This will bolster the overall value proposition of PCs as a hub of productivity and entertainment, but its impact on kick starting OEMs’ PC revenue growth will be limited. The longer purchasing cycles that typically accompany upgrades of older devices will defer purchases by consumers and enterprises, and Windows 10’s infancy in the market will restrict its ability to spur purchases of new devices until its quirks and deficiencies are ironed out by Microsoft.
Moore’s Law is still in play, but its role is growing smaller.
As it becomes increasingly difficult for Intel to adhere to Moore’s Law as chipset specifications plateau, how devices are being used by consumers and workers is moving to the forefront of purchasing decisions. In June 2015, TBR undertook a large study of device owners – more than 3,000 spread across the U.S., Germany and China – to discover how they are using their devices.
TBR’s research found that the ability to flow – to move seamlessly between numerous devices as they consume content and react to a steady stream of personal and work communications – has redefined the computing experience. PCs “do-it-all” capabilities have cemented them at the center of a diverse and prolific device ecosystem.
A growing list of new voice, video and search capabilities made possible by Windows 10 requires a processor platform that goes beyond providing additional horsepower for traditional use cases. For example, TBR estimates than more than 1 billion PCs are more than three years old, and Skylake’s promises of faster startup times, improved battery life and enabling of new technologies such as a wireless charging and wire-free displays represent an important shift for the PC industry.
New chipsets and devices will begin to move away from “speeds and feeds”.
Skylake and Skylake-equipped computing devices are step forward for Intel and OEMs to capitalize on the Intel’s architecture as the dominant productivity platform, even in markets where smartphones and tablets outnumber PCs, as well as quickly atone for some of the manufacturing delays and performance issues of Broadwell, Skylake’s predecessor; Skylake arrives less than a year after release of Broadwell in Janaury 2015. TBR believes OEMs and Intel recognize processors released during the “tock”, typically associated with performance improvements, now need to be more than technology upgrades.
Combined with weaker demand for PCs, slowing growth in smartphones and changing computing use cases, Skylake highlights how device vendors and Intel are acutely aware their industry is at an inflection point. With Skylake, the conversation shifts from spurring growth driven by technology gains to laying the foundation for growth as vendors leverage Skylake’s technology to rekindle device demand by offering make thinner, lighter and more power-efficient form factors. However, obstacles in user familiarity with Windows 10 and longer device lifecycles will remain through 2016, muting the impact of Intel’s new chipset to spark overall PC market revenue growth.
Jack Narcotta, Devices Analyst Technology Business Research, is responsible for reporting on vendors such as Acer, Apple, Asus, Fujitsu, Google, HP, Lenovo, Microsoft, Samsung, Sony and Toshiba. His focus is on recognizing trends and opportunities and understanding business models and competitive landscapes in the enterprise IT and consumer device markets.
