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Intel is about to drive another stake through the heart of the tablet market

Eugene Kim   

Intel is about to drive another stake through the heart of the tablet market
Tech4 min read

Intel CEO Brian Krzanich

Reuters/Robert Galbraith

Intel CEO Brian Krzanich

There's been a lot of excitement around the release of Intel's new sixth generation Core processor on Wednesday, but one particular industry may not be too happy about it: the tablet market.

Intel calls its new chips, codenamed Skylake, the company's "best processors ever," with significantly improved performance. It says they could deliver 2.5X better speed and 3X battery life, while offering 30X enhanced graphics than the average 5-year old PC.

Basically, it allows for the PC to cut its weight and thickness in half, while speeding up the overall performance. On top of that, it would have less heating, making some laptops go fanless, and almost no wires with its USB-C cable compatibility.

In other words, the PCs with Intel's new Skylake chips could possibly look as sleek as some of the tablets, while providing the same type of computing power you'd expect from any personal computer.

"It's taking the good parts of a phone and tablet, and then adding it to the benefits of a PC," Patrick Moorhead, principal analyst at Moor Insights & Strategy, told Business Insider. "If Intel, Microsoft, and its big partners, like HP, Lenovo, and Dell, can get aligned, they will revive the PC market - and I do think it'll come at the expense of larger tablets."

Moorhead said that there's been a general conservativeness in the PC industry that caused most manufacturers to not be aggressive enough with their designs. But the new Intel chips will allow them to be more creative, and it's already being seen with some of the new Skylake-powered PCs scheduled to be released, he pointed out.

"When you look at what is actually going to be available and what has been promised, I would say there is more alignment than ever before," he said. "I think the Skylake is the PC industry's biggest opportunity in the last 5 years, and it's up to the players in it to take advantage of it."

lenovo ideapad miix

Lenovo

Lenovo's Ideapad MIIX 700, a tablet that doubles as a laptop, will run Intel's newest chip.

In particular, when Skylake is combined with Microsoft's latest Windows 10 operating system, it enables a lot of unique features, like facial recognition and wireless charging, which will only trigger more people to consider buying a PC over tablets, analysts say.

"The new features supported by Skylake, and in combination with Windows 10, will enable more attractive PC designs that will address today's needs better than older products, and compete better with tablets and phones," IDC analyst Loren Loverde told us.

"Now, it's the PC markets turn to come back with new features to differentiate it from the tablet market and give it a unique proposition that the tablet can't touch," another IDC analyst, Shane Rau, said.

If true, the tablet market could be in trouble. IDC's latest data suggest the worldwide tablet market has been in decline, dropping another 7% year-over-year in the second quarter of 2015. Apple's iPad, largely credited with creating the tablet market, saw its sales drop another 18% in its latest quarter from the previous year, selling 10.9 million units, a four-year low. Its sales now accounts for only 9.1% of Apple's overall revenue, and is now a smaller business than the Mac products.

Neil Cybart, an independent Apple analyst at Above Avalon, writes the tablet market is in even worse shape in a recent note.

"…the iPad and tablet have been on the decline for years and things continue to worsen with the overall tablet market hitting negative territory for the first time. All momentum has been lost," he wrote.

cybart1

Above Avalon

But that doesn't mean the tablet market will be wiped out all of a sudden. Skylake won't be available on laptops until later this year, and it takes a long time to revive a market as big as the PC business. Plus, Apple is rumored to be coming out with an even bigger iPad later this year.

"Reviving the PC business takes a lot more than just having a better processor," Mark Hung at Gartner said. "With Skylake's launch, coupled with Windows 10, there's some hope in the industry that it can, it not revive, slow down the decline of PC sales."

IDC's Shane Rau added there's other macroeconomic issues that need to be addressed to in order to help boost PC sales. In any case, the turnaround won't happen in the near short term, he stressed.

"I think this could be part of the long-term push back of the PC market on the tablet market, and these new features will have a positive effect [on the PC market]," he said. "But they're going to play out over time, and not just stimulate the market at any one moment like this holiday season."

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