The week ahead

Tom Hudson: Watch for a shift from Intel

 

Special to The Miami Herald

The move to mobile isn’t just shaking up the media and advertising worlds. It also has hurt technology giants that found themselves flat-footed even as the world relies on their wares.

Intel is synonymous with semiconductors. While the company did not invent the integrated circuit, Intel’s founder was a co-inventor who is credited with using silicon, thus giving Silicon Valley its namesake. As computers shrank and computing speeds quickened, Intel rode the technological wave to great riches. “Intel Inside” became a mark of quality for hundreds of millions of personal computers.

But on Thursday the company is expected to report revenues and earnings dropped in 2013 for the second consecutive year. Even more importantly, the company’s forecast for this year has been for stagnant revenues. If that guidance holds Thursday, it would mark the potential of three years with no sales growth.

What’s happened? Mobile and tablets. Intel’s traditional computer chip business is eight times bigger than it’s mobile and tablet operations. With PC sales falling, Intel has been shifting its business model to broaden the devices using its chips. The company will spend 75 percent more on investing in its tablet-focused businesses compared to just two years ago.

Investors have been patient. Shares were up 20 percent last year. Many of them were attracted to Intel’s 3.5 percent stock dividend. While Intel has matured from a pure growth technology investment, its business has too.

Tom Hudson is a financial journalist. He hosts The Sunshine Economy on WLRN-FM in Miami, where he is the vice president of news. Follow him on Twitter @HudsonsView..

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