The pandemic-related demand spike for PCs drove Intel’s laptop shipments to a lifetime record in Q1 2021, with notebook sales volume up 54 percent compared with the same period last year. Intel didn’t break out exact numbers for its laptop shipments. But PC sales remain central to Intel’s business, and growth in this market helped masked a drop in data center sales. DCG revenue for the quarter was $5.6B, down 20 percent from Q1 2020, while PCG revenue was $10.6B, up 8 percent. Because Intel’s PC business is significantly larger than its data center business, the respective shifts mostly canceled each other out.
According to Intel CEO Pat Gelsinger, this trend is likely to continue. “2021 is shaping up to be the largest PC market ever,” he said. “In many markets, one PC in every home is no longer enough. The number of PCs per household, what we call PC density, is increasing. We are seeing strong growth in education, where on a global basis, the number of PCs per hundred students and teachers still remains in the single digits.”
It’s going to be very interesting to see if this trend continues post-pandemic. Many schools will have purchased huge numbers of Chromebooks and invested in online educational resources. It’s obvious to think they’ll want to continue using both as things move back towards normal. At the same time, online school has been disastrous for many teachers and parents, and this could spark a pushback against continued heavy reliance on these tools, even if we’d normally expect a more permanent adoption shift.
One underappreciated trend during the pandemic has been a decline in desktop sales relative to laptops. Intel’s supplementary platform information captures this data and some other interesting tidbits:
Data center prices fell year-on-year, but not quarter-on-quarter. Intel believes Q2 data center volume will improve on Q1, so the company isn’t overly worried about the sales slump, though some analysts have voiced concerns that this could be a sign that Epyc is eating into Intel’s market share.
Desktop volumes fell sharply compared to Q4 2020 and modestly compared to the same period last year. Desktop sales really started to drop in Q2 of 2020 as the market shifted sharply towards laptops, so we’ll see if there’s any rebound as the year progresses. The small rise in ASPs may reflect the recent Rocket Lake launch. Notebook volumes were up 5 percent compared with Q4 2020. That’s significant, given that Q1 is typically the weakest quarter of any given year. Notebook ASPs, however, continue to drop — by 23 percent year-on-year, and 5 percent quarter-on-quarter.
There are some potential reasons for this. It’s possible notebook ASPs have come down due to competition from AMD, but Ryzen 4000 series didn’t have much market uptake and the Ryzen Mobile 5000 series hasn’t been in-market very long. Increased competition from AMD could account for some of these ASP shifts, but probably not all of them. We suspect these drops reflect the market shift towards Chromebooks. Sales of Chromebooks were up by as much as 90 percent last year in some quarters, and since these systems tend to sell for less money, they’re obviously going to drag on average selling prices.
Other major announcements from Intel during the quarterly call included news that it will improve substrate production in Q2, reducing current production bottlenecks. Intel claims it will “tape-in” the design for Meteor Lake in the next couple of weeks. Tape-in means the various design teams contributing blocks to the final SoC have finalized their own contributions to the product. Work now begins on integrating those segments. When complete, Meteor Lake will “tape out” and head for manufacturing. The chip is currently expected in-market in 2023.
Market share estimates will be especially interesting to watch this quarter. AMD lost market share in Q4 2020 despite shipping every chip it could make, because demand outstripped supply. We’ll see if the two companies are closer to parity this time around, or if the absolute figures still favor Intel.
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