Intel Likely Business With Apple Inc

The chipmaker has to grab the opportunity to take out the company from the blows it receives from declining PC market.

Last week, the analysts at CLSA Research had declared that the Santa Clara, Calif. firm, Intel Corporation has bagged around 20-30% share in the Apple’s forthcoming iPhone 7 modem. The chipmaker has been able to make a decent comeback as a baseband supplier of Apple’s iPhone after almost five long years.

The endorsement of Cowen & Company and Credit Suisse further strengthened the claim of CLSA Research. The chipmaker has faced intense wrath of the investors after its Client Computing segment started showing consistent signs of weakness. Such poor performance was alarming for the investors as the client computing segment would cover up the substantial portion of the company’s total revenue.

Moreover, the fourth quarter reports indicated that the more than 58% of Intel’s sales were accumulated from the contribution of the Client Computing segment. The slow trend of the segment can be justified from the soft demand in the PC market as the consumers are continuing rapidly to move towards smartphone.

The revenue generated from the Client Computing segment in the fourth quarter reflected an increase of 3% by reaching at a figure of $8.8 billion. But, the segment’s sales slumped down by 1% in comparison with last year’s same quarter. After thoroughly studying the weakening PC market, the analysts at Credit Suisse brought down their earnings estimates for the chipmaker. Nevertheless, the Swiss firm is still optimistic in relation to the company’s stock. The firm believes that the growing softness in the Client Computing segment is more likely to be offset by the chipmaker’s potential modem win in the Cupertino, Calif. Apple Inc.’s upcoming smartphone.

The Switzerland based research firm also stated that the analysts envision that the chipmaker share of around 30% in the iPhone 7 will aid the company in the generation of additional revenues in the current year up to around $266 million and by 2017, the analysts expect the figure to go up to $815 million.

Furthermore, through this initiative the $152 billion organization is likely to shake the Qualcomm’s strong Apple monopoly. However, the analysts are not much worried for the San Diego, Calif. firm. The challenge will be for Intel Corp. as during the Mobile World Congress, Qualcomm Inc. disclosed its getting back in the business with South Korean Samsung. If Intel could pull off the deal with Apple then it would be able to grab an around $1 billion opportunity.

Since the start of the fiscal year 2016, the chipmaker stock has been slumped down by almost 10% whereas the rival Qualcomm shares has been gone up by 4%, while covering the plunge it had witnessed in the prior year. As at the market which closed on Friday, the Intel Corp. stock stood at a price of $31.76. the 52 week range of the stock is $25 to $36. Secondly, the rival Qualcomm stock stood at $52.22 at the Friday market. The 52 week range of the stock is $42 to $72.