Intel (INTC) Looks to Key Southeastern Asia Country to Bolster Future Growth

November 27, 2012 10:24 AM EST
Intel (Nasdaq: INTC) may be down, but it certainly isn't out.

According to the WSJ, Intel might have a friend in Indonesia. As more mature markets are turning to tablets and oversized smartphone (is the Galaxy Note 2 a small tablet or large phone?), up-and-comers like Indonesia are tuning into PCs and laptops.

Global sales for Intel fell last quarter while sales of PCs rose 20 percent in 2012 so far. Moreover, Indonesia, the largest country in Southeast Asia, has only one out of 10 people owning a computer.

Managing Director of Southeast Asia, Uday Marty, commented that Indonesia is 240 million people strong and over half are less than 30 years old.

Intel's lack of presence the the smartphone and tablet market has largely hampered it. It garners about 80 percent of sales from chips that power PCs and most companies are using technology licensed by ARM Holdings (Nasdaq: ARMH).

The company has tried to break into the slimmer, sleeker design segment via new Ultrabook offerings. Adoption has been weak, however, given strong demand for tablets and price tags on Ultrabooks starting in the $1,000 range.

To be sure, Indonesia isn't the end-all solution to Intel's problem; it will need to sell lower-cost units to gain market share now, sacrificing profits in the process. But, should Intel bolster a position now, as well as some of the outlying countries, then it might be able to soften any downside now while positioning itself for growth later on.

Oh, and it still needs to work on efficient chips for portable devices, or else nothing else really matters. In the long-run, Indonesia will start to become a mature market and their taste for high tech will also sway to smaller, more powerful offerings.

Intel shares are up about 0.8 percent on the session.

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