Every year, the consumer electronics show, or CES, rolls around in early January to bring a flurry of announcements, keynotes, and gadgets. Last year, Qualcomm (QCOM 0.82%) -- the company that supplies chips for the majority of the world's phones -- kicked off the event with an interesting keynote and some very compelling product launches -- the Snapdragon 600 and 800, both of which went on to dominate the mobile landscape during 2013. This year, Intel (INTC +2.35%) CEO Brian Krzanich is set to give the opening keynote.
What to expect?
No other details were provided in Intel's media alert. However, Intel is also hosting a CES Press Day, where it will be giving an "exclusive technology briefing" in which it will update press and analysts on its "vision for improving interaction with computing across 2 in 1s, tablets, all-in-ones, and more."
It seems likely that Intel's big CES push will be focused mostly on tablets and "2 in 1" devices and that smartphones probably won't be too highly promoted here. This is likely due to the fact that the more appropriate venue for smartphone-related announcements is the Mobile World Congress in Barcelona, Spain, which takes place in late February.
Android tablets are the big thing
What will be interesting to see is Intel's momentum in Android tablets. With Apple's (AAPL 1.69%) iPad now behind the Android in tablet revenue share, and with Windows 8.1 tablets still at pretty low share, Android is by far the most widely supported and important tablet platform today. Success in the tablet market for a merchant chip vendor means success on Android.
As far as Android tablets go, Qualcomm is the current leader in the majority of the high-end, big-ticket designs, such as the Nexus 7 and the Kindle Fire HDX. The majority of the volume, however, is in the lower-end flurry of white-box tablets. In order to really succeed, Intel is going to need to play pretty meaningfully in both the high end -- higher margin, higher visibility -- as well as the lower end, where the volume is. Intel made it very clear at its recent analyst day that it was going to play pretty broadly in the tablet market, so it'll be interesting to see which company Intel has partnered with and the quality of the designs that come from this partnership at CES.
Let's hope the focus isn't on PCs
Under the prior management, Intel often spent these types of events focused on the PC and its attempts to reinvigorate sales there. This is understandable, particularly as the PC client group within Intel is a $33 billion-per-year business with a roughly 35% operating margin. To put this in perspective, Qualcomm guided to $26-$27.5 billion for its next fiscal year.
But investors probably don't want to see Intel talk about PCs too much at this point; the market is in decline, and until it shows signs of stabilization or even slow growth, it is more of a liability than anything else. What investors want to see is that Intel can get back to growth even in a weak PC environment. That means success in mobile devices.
Foolish bottom line
Intel has a chance to really wow the crowd at CES if it talks up its mobile chips and Android design wins. Announcements of Android tablet designs from the major players including Lenovo, Samsung, ASUS, LG, and others would really do wonders for the stock. There's probably not going to be too much on the phone side of things since CES isn't really the appropriate venue for it. As long as Intel doesn't spend too much time talking about PCs and ultrabooks and instead focuses on tablets, it should be a good keynote and a good show.
