Will Intel Get Mobile in 2013?

As December comes to a close, 2013 is just around the corner, and it's a good time to look at the future prospects for the stocks you own. If you don't know where a company's headed in the next year and beyond, then it's impossible to make an informed decision about whether you should add the stock to your portfolio -- or sell it if you already own it.

Today, I'll look at Intel (NASDAQ: INTC  ) . The company has been a member of the Dow Jones Industrials (DJINDICES: ^DJI  ) since 1999, but the chip giant has had a dreadful 2012, with shares down more than 10% as sales of PCs have continued to dwindle. But will Intel finally figure out how to break into the mobile market more heavily next year? Read on to see more about Intel's prospects for 2013.

Stats on Intel

Average stock target price

$23.14

Full-year 2012 EPS estimate

$2.11

Full-year 2013 EPS estimate

$1.93

Full-year 2012 sales growth estimate

(1.1%)

Full-year 2013 sales growth estimate

1.8%

Forward P/E

10.8%

Source: Yahoo! Finance.

Will Intel bounce back in 2013?
Analysts are looking for just a modest recovery from Intel in 2013, with the stock target price implying a 10% gain. Yet as falling earnings-per-share estimates show, that will all have to come from multiple expansion unless the company can deliver some positive surprises on the earnings front.

Much has been made of Intel's failure to break into the mobile market, as competitors like ARM Holdings and Qualcomm (NASDAQ: QCOM  ) have built up a big lead in the space. But as Fool contributor Doug Ehrman noted recently, what's really missing from Intel lately has been a groundbreaking jump in performance that would make buyers excited about PCs again. Many of the problems that PC producers Dell (UNKNOWN: DELL.DL  ) and Hewlett-Packard have suffered lately trace back to the simple fact that customers want more innovative products than plain old computers. If Intel can refocus on research and development to boost its technology and find a new breakthrough, it would go a long way toward halting the decline of the PC and give Dell and HP a chance at fighting back against Samsung and other mobile-device makers as well.

Meanwhile, Intel is aiming to broaden its scope, following IBM's (NYSE: IBM  ) framework of broadening into more lucrative niches of the technology business. Intel's expecting to release new chips for mobile devices early next year, and the fast-growing server market makes producing high-margin processors for servers a big potential profit-maker for the company.

One thing Intel has going for it is its dividend. But as other tech companies start upping their payouts, Intel's 4% yield won't look very attractive if it doesn't come with some capital appreciation.

Intel has something to prove in 2013, and it needs to answer the call of investors and show why it has dominated the processor world for decades. Fortunately, despite having let the competition get ahead of it, Intel should have the ability to catch up and reestablish its leadership position.

Learn more
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  • Report this Comment On December 23, 2012, at 11:35 AM, techy46 wrote:

    Will Intel Get Mobile in 2013? Absolutely they've already started with the Atom Z2760 Clover Trail for Windows 8 tablets. Next up will be the Atom 3D 22nm Silvermont in 2nd half 2013.

  • Report this Comment On December 24, 2012, at 12:02 AM, symbolset wrote:

    No, Intel will not "get" mobile in 2013. Intel is still about improving their widgets and maintaining their great margins on extant products by avoiding "cannibalization". "Best Intel product ever! The same thing only faster and with 3 new features!"

    To "get" mobile you have to stop everything about your line of thinking. You have to start over. You have to get away from the idea of "improving the widget" and start from scratch at "improving the human experience through technology".

    I have no doubt that some responsible person from Intel is going to read this so listen up: Intel is not and has _never_ been in the widget business. Never. Intel is and has always been in the human life improvement business. Intel's business is to enable and empower humans to make their lives better through technology - AND NOTHING ELSE. That is why we paid Intel the premium prices we did and if they won't deliver that now then we'll pay somebody else who will.

    Until Intel reorganizes around this concept they will not "get" mobile because we are going to the legacy-free mobile world to get this benefit and abandoning them because they _just don't get this_. The mobile migration is, in fact, a very real direct response to their desire to protect their established markets.

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