The Analyst Who Took Down Intel

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July 9 (Bloomberg) -- Evercore Partners Managing Director Patrick Wang discusses why he downgraded Intel with Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Explain to viewers this shift from pc to mobile not being as good as you might think.

It comes down to dollars.

A lot of times investors thinking about intel wanted thing about percentage points, but it comes down to dollars.

When you take a look at the cannibalization that has been going on, tablets have been doing it for two years.

There has been no growth in notebooks.

When you run the numbers and take a look at their profit dollars per tablet, what kind of system you get for a notebook?

Think about it this way, in the next four months to six months, are you going to buy a laptop or a tablet?

Are you going to buy five tablets?

You have to sell five times as many mobile devices to make up for one pc.

That is incredible to me.

It really is a structural issue.

It really is.

As we get to the back half of the year, the reason that investors, the core of investors up there this week, we are getting to the point where intel is willing to launch its first target for the tablet market.

It has really been apple and samsung's market.

As we get to the fourth quarter, this is really the first time we are going to see intel pushing hard.

You will get some.

The good news is that they are participating in the cannibalization but the bad news is that it is still occurring.

Profit dollars are that much less than a notebook.

This is only part of it.

The other part of it is the server, the cloud.

What is interesting is that every tablet that is connected has to do the number crunching, twitter, things like that.

The server is going to go through a similar transition over the next few years.

Intel as a business generated $10 billion in revenue last year at interesting is a 50% operating margin.

Unheard of.

I think that as we go forward, that profit is going to be at risk as well.

Both sides of this.

I wish we had more time.

This text has been automatically generated. It may not be 100% accurate.


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