The reassessment, issued Wednesday, comes nearly three weeks after Intel acknowledged that a weakening market for traditional personal computers running on its microprocessors will cause its third-quarter revenue to fall below last year's results. The company, which is based in Santa Clara, Calif., had previously expected to at least match last year's performance.
Ellis predicted the growing popularity of tablet such as Apple Inc.'s iPad will cause Intel problems for the next few quarters. The rise of the iPad and other tablets is troubling for Intel, because most of those machines don't run on its microprocessors. In contrast, Intel's chips are used in most PCs running on Microsoft's Windows operating system.
Intel is trying to adapt by designing more power-efficient chips for tablets. The company plans to preview tablets running on its processors on Thursday in San Francisco. Those tablets will run on Windows 8, a dramatic overhaul of Microsoft's operating system that is scheduled to be released Oct. 26.
Ellis isn't expecting a big lift from the new line of tablets. He trimmed his full-year earnings estimates for Intel to $2.10 per share in 2012 (from $2.12 per share previously) and to $1.92 per share in 2013 (from $2.08 per share previously). Ellis also dropped his price target for Intel's stock to $26 from $29, and downgraded the company from a "Buy" to "Above Average."
The downgrade did not appear to hurt Intel shares, which added 10 cents to $22.64 in afternoon trading. The stock has changed hands between $20.40 and $29.27 in the past 5 weeks, and is down 10 percent since the company cut its guidance earlier this month.
Source: http://www.kpic.com/news/tech/Analyst-downgrades-Intel-on-tablet-concerns-171534701.html
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