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By Jeremy Glaser | 01-07-2011 04:06 PM

Intel: Global Consumer is Very, Very Good

Intel's Kevin Sellers shares his thoughts on the state of the global consumer, the tablet market, corporate spending and more.

Jeremy Glaser: For Morningstar, I am Jeremy Glaser. I am here at the 2011 Consumer Electronics Show. I am very pleased to be joined by Kevin Sellers. He is the Vice President of Investor Relations at Intel.

Kevin, thanks so much for taking the time today.

Kevin Sellers: You bet. Happy to talk.

Glaser: So, at your press conference earlier, you talked about how the consumer is king, and how having Intel processor consumer devices has been key growth for you guys. Can you talk a little about the state of the consumer right now?

Sellers: So, good point. The consumer is very, very good, except we've seen some weakness in North America and Western Europe, but what's interesting is, around the world places like Brazil, places like China, places like Russia continued pretty strong momentum there.

So I think sometimes we forget that this is a global business we are in and it really is the global consumer that's driving so many of the trends you see here. It's really moved away from being just a North American-centric consumer market into really a global consumer market, and so there are some pockets of some softness, but generally continue to be very stronger around the globe.

Glaser: When you think about the emerging market consumer, what sort of devices are they demanding, is it different from the consumers in North America, Western Europe?

Sellers: Yeah, it's a great question because it leads I think to a bit of a misconception when you say emerging markets, people think cheap, right? What's interesting is, in emerging markets we're finding that there's an aspiration, they want to participate in the digital economy and they don't want to participate in a way that's sort of low class. So we find for our products especially is the mix of products that we sell in places like Brazil or Russia or other places, is really quite strong and quite rich, very comparable to what you would see in more say North America or Western Europe.

So, we're seeing very much an aspiration desire to participate in sort of the way the rest of the world is participating. So, for us, it's a terrific growth engine, but it also isn't a growth engine that drives necessarily lower price products or cheaper products. It's a very good mix of product for us.

Glaser: On the enterprise side, obviously, that's still an important business, people have been waiting for a while for the corporate refresh cycles to really kick-in in earnest. Do you think its here, do you think businesses are ready to invest again?

Sellers: It's definitely here, but what we have not seen is a snap, sort of hockey stick kind of a pickup. What we've seen is a pretty consistent, from about the last three or four quarters a pretty consistent level of business from the enterprise segment and as we look out into 2011 – we're in 2011 now, it doesn't look like we're done. I think we've got several more legs to here.

So, it seems to be more of a – in the past you've seen some hockey stick kind of refreshes, this seems to more methodic kind of rollout of new technology, but many enterprises are dealing with the issues of having very old technology, because of the downturn that hit really in late '08 and early '09, its sort of put the kibosh on any spending for quite a while and so. It's now gotten a lot of enterprises to the point where they have to invest to stay competitive and we've definitely seen that in our numbers in the last few quarters and we're anticipating that t trend will continue through '11.

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