INTC - Intel

[Palantir]

Yeah but developers are a small group of people, and not the broader consumer base. Consumers could in the future be limited to thin clients.

[bargainman]

Yeah but developers are a small group of people, and not the broader consumer base. Consumers could in the future be limited to thin clients.

And all those clients are going to do what?  ..

Interact with servers..  Which is what programmers are going to program too.  Data centers are going to grow and grow.  Processing power for video and other things like research, ecommerce, etc is just growing and growing.  Emerging markets are growing PCs.  There's a reasonable amount of attrition with current data centers which require constant updating. 

[Palantir]

Yeah but developers are a small group of people, and not the broader consumer base. Consumers could in the future be limited to thin clients.

And all those clients are going to do what?  ..

Interact with servers..  Which is what programmers are going to program too.  Data centers are going to grow and grow.  Processing power for video and other things like research, ecommerce, etc is just growing and growing.  Emerging markets are growing PCs.  There's a reasonable amount of attrition with current data centers which require constant updating.

It's true that the computing function will be outsourced to server farms, but my understanding is that these mega server farms will be far more efficient using chips due to economies of scale, hence the lower total demand.

To me it seems that Intel is being eroded in a large market and getting stronger in a smaller niche. Furthermore, couldn't a lot of these GPGU manufacturers also compete with Intel for space in centralized servers?

[ItsAValueTrap]

When I looked into Intel last year, I remember reading somewhere about them developing tools to help make it easier for software developers to write applications that take advantage of parallel processing. It's a hard problem to deal with, but it can be manageable.

It's a hard and nasty problem right?

Parallel processing has been around for a long time.  Some programs lend themselves easily to parallel processing and so performance will pretty much scale linearly with more cores (*as long as there are no bottlenecks).  Photo and video editing are like this, though right now not all programs are written for parallel processing.  It's pretty easy to do... I used to write photo software and I have no idea what a race condition is.  It's just that some people haven't bothered to do it yet.

Other programs don't scale so easily.  Making an algorithm parallel can be very difficult and time-consuming to do.  Making it parallel may also make it run a lot slower.

---
I don't think that the slowdown in performance increases is Intel's problem.  Intel will have a problem if it can no longer double transistor count.  After that, their competitors will catch up and their moat will begin to evaporate (!!!).

Here's what Gordon Moore has to say about Moore's Law (2005):
http://news.techworld.com/operating-systems/3477/moores-law-is-dead-says-gordon-moore/

[ItsAValueTrap]

I don't think it makes sense to do a thin client over the Internet.  The bandwidth costs will kill you... among other problems.  If your screen resolution is 1920x1080, you have to transfer all that data over the Internet.  And you can't compress that data as efficiently as video streaming sites.

This technology kind of exists now.  Play around with VNC.  It's slow and crappy.

2- Virtualization will actually result in higher capital costs I believe.  But I am not an IT guy at all.
http://www.brianmadden.com/blogs/brianmadden/archive/2011/10/05/desktop-virtualization-is-not-about-saving-money.aspx

2b- Historically, the cost of hardware has been coming down by about 2X every 2 years.  Even if virtualization does reduce hardware costs, I don't think it will be a problem for Intel.  We usually end up finding new applications for all the new processing power.

nicer-looking GUIs
ultrabooks / more power efficient processors
antivirus / running actual viruses or malware.  Some people have really slow computers because of all the crap that is running on it.
games
video editing

Though to be fair, many people don't need more processing power.  So we could arguably be at the point where not every consumer needs more processing power.

There are many business applications which need more processing power... I see those markets continuing to drive demand.

[mikazo]

Though to be fair, many people don't need more processing power.  So we could arguably be at the point where not every consumer needs more processing power.

This is a good point. The consumer of today worries more about things like efficiency and battery life. While faster processing is a factor in Intel's growth, it's probably not the main concern. I would worry more about desktop/laptop sales. Windows 8 could be what pushes growth again soon, because everyone is just waiting until the release.

[rimm_never_sleeps]

it used to be the #1 recommended upgrade was a new processor. now it's an SSD. that's a big shift. I upgraded to an SSD. I just don't need a new processor for what I do. And what most people do.

[LC]

Intel broke under 22 today, I'm looking to pick up some more shares if the market cap goes under 100B ($20/sh). I am wondering what the board's thoughts are.

[txlaw]

I'm starting to follow the price action again.  If it drops under $20, I will seriously consider purchasing again for my parents' account.

[Palantir]

I'm a n00b, so forgive me. But isn't the idea of server virtualization that you will no longer need large, expensive servers but rather can make do with cheaper, commodity servers? If so, doesn't that put a dent into the idea that increasing computing demand for server infrastructure will drive Intel's growth?