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Processor War Breaks Out At CES Intel In The Cross Hairs

Suppliers to the CE industry are facing a major dilemma with tens of thousands of retail buyers staying away from CES 2022 due to COVID restrictions resulting, in questions about the viability of a new 2022 product.

Another big issue is price rises with brands telling ChannelNews that retailers “have to wear the cost of price rises coming in 2022”

Several of the brands are also holding back press releases because they are uncertain as to whether their new 2022 which they are unable to show to buyers will be picked up when they do one on one visits with retailers locally.

Normally manufacturers design a product, show it to retailers and if they get orders at CES they move it into production.

One major brand who did not want to be named said “New designs in particular new product innovation is often driven by new processors or processor innovation. During the past year it’s been impossible to get chips let alone new generation processors.”

“This is having an impact on what new products a Company can deliver resulting in a lot of the new 2022 CES products being design variations of last years products”.

Several Australian distributors that are at the show told ChannelNews that it’s going to be tough getting a fix on new products for 2022 because so many brands have chosen to not attend the Las Vegas event.

There is also major concern about price rises with several brands telling ChannelNews that prices are set to rise by up to 25% because of material price rises and shipping cost.

One local executive said “Retailers have to absorb these cost rises. Prior to the holiday season retailers were pushing brands to absorb price rises this cannot happen in 2022”.

Another major brand executive said, “We have grown our online operation in Australia by over 500% and if CE retailers keep pushing back against price rises, we will simply sell direct as we have no other choice because suppliers like us are not prepared to absorb the cost of price rises”.

As brands struggle to get processors a chip war has broken out at CES with Intel, Nvidia, and AMD (Advanced Micro Devices) and Qualcomm set to go after each other’s clients with new processor and semiconductor offerings.

The move comes as Intel the world’s largest PC processor to date struggles to hold onto share. Their answer to the decline in demand for their products is a new graphics chips aimed at fighting Nvidia and AMD who have a major share of the PC gaming market which is one of the most profitable for PC manufacturers.

Up to now Intel has dominated in the PC market now Qualcomm, the biggest maker of mobile-phone chips, is pushing hard to take share away from Intel especially as PC brands are looking to deliver lighter high-performance notebooks that have better power management.

Qualcomm is leveraging its strength in smartphone technology.

The shift in the competitive landscape is set to play out in retail stores in Australia where retailers such as Harvey Norman who are seeing a significant increase in demand for PCs from the likes of Lenovo, HP and Acer.

Bloomberg claims that Intel’s loss of leadership in chip-manufacturing technology has exposed it to challenges from newly confident rivals in the PC market.

The company’s response under Chief Executive Officer Pat Gelsinger is to defend that market and, at the same time, to chase sales in its rivals’ strongest businesses.

That fight will likely play out beyond 2022, with most analysts predicting Intel will struggle to boost sales this year, compared with revenue gains forecast for the other companies.

Earlier today at CES Intel announced its 12th generation Core mobile processors, including 28 new models that are as much as 40% faster than their predecessors.

they also introduced a new Arc graphics chip which is currently being shipped to PC makers, including Acer, Dell, and HP.

The Arc chips are Intel’s attempt to cut into the dominance of Nvidia and AMD in high-end graphics.

Nvidia countered by unveiling new graphics chips for laptops, aimed at bringing high-end gaming and artificial intelligence capabilities to the thinnest and lightest computers.

The GeForce RTX 3080 Ti graphics processor will equip notebooks that will be priced starting at $3,000, giving them better capabilities than many previous high-end desktop models claim Nvidia executives.

Notebooks running on the 3070 Ti chip will start at around $2,000.

At CES AMD CEO Lisa Su showed off new laptop and graphics processors, meant to continue the company’s run of stealing market share from Intel. AMD’s graphics chips have come closer in performance to Nvidia’s, but the larger company still controls the majority of the market for add-in cards for PC gamers that can cost more than $1,200.



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