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- 1. Investor Call / WebcastInvestor Call / Webcast Eric KimEric Kim Senior ViceSenior Vice--President & General ManagerPresident & General Manager Digital Home GroupDigital Home Group PostPost--CES Recap of IntelCES Recap of Intel’’ss Consumer ElectronicsConsumer Electronics BusinessBusiness
- 2. Risk Factors TodayToday’’s presentations contain forwards presentations contain forward--lookinglooking statements. All statements made that are notstatements. All statements made that are not historical facts are subject to a number of risks andhistorical facts are subject to a number of risks and uncertainties, and actual results may differuncertainties, and actual results may differ materially. Please refer tomaterially. Please refer to our most recent Earningsour most recent Earnings Release and our most recent Form 10Release and our most recent Form 10--Q or 10Q or 10--KK filing for more information on the risk factors thatfiling for more information on the risk factors that could cause actual results to differ.could cause actual results to differ. If we use any nonIf we use any non--GAAP financial measures duringGAAP financial measures during the presentations, you will find on our website,the presentations, you will find on our website, intc.com, the required reconciliation to the mostintc.com, the required reconciliation to the most directly comparable GAAP financial measure.directly comparable GAAP financial measure.
- 3. Digital Home GroupDigital Home Group Delight consumers by delivering the advancements for next-generation consumer electronics with rich, interactive Internet content and traditional broadcast programming
- 4. IntelIntel’’s Consumer Electronics Strategys Consumer Electronics Strategy Focus on Transition to Internet Connected (CE 3.0)Focus on Transition to Internet Connected (CE 3.0) The Internet Changes the Game! CE 1.0CE 1.0 Analog TVAnalog TV CE 2.0CE 2.0 Digital TVDigital TV CE 3.0CE 3.0 Internet ConnectedInternet Connected
- 5. An Update Since Investor Day 2008An Update Since Investor Day 2008 Strong Execution Against PlanStrong Execution Against Plan • Intel Media Processor CE3100 (“Canmore“) PRQ’d and Silicon Shipping! • Strong Tier-1 OEM Design Win Progress • Samsung & Toshiba Announced Products at CES • Widget Channel Collaboration with Yahoo! Announced at IDF and Launched at CES * Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of otherss
- 6. IntelIntel®® Architecture CoreArchitecture Core •• Performance and headroomPerformance and headroom •• Compatible with SW that powers theCompatible with SW that powers the InternetInternet IntelIntel®® Media Play TechnologyMedia Play Technology •• HW/SW decode of broadcast,HW/SW decode of broadcast, Internet,Internet, BluBlu--ray*ray* •• Seamless viewing experienceSeamless viewing experience LeadingLeading--edge CE Featuresedge CE Features •• HD video processing, composition,HD video processing, composition, displaydisplay •• Up to 7.1 channel output for homeUp to 7.1 channel output for home-- theater audio quality &theater audio quality & BluBlu--rayray requirementsrequirements •• Powerful 2D/3D graphics enginePowerful 2D/3D graphics engine •• High performance for advancedHigh performance for advanced UIs,UIs, EPGsEPGs, gaming, gaming Product plans, dates, andProduct plans, dates, and specifications are subject to change atspecifications are subject to change at any time, without notice.any time, without notice. IntelIntel®® Media Processor CE 3100Media Processor CE 3100 Key Features & BenefitsKey Features & Benefits * Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of otherss Shipping Since in Q3!Shipping Since in Q3! Intel ArchitectureIntel Architecture CoreCore MemoryMemory ControllerController I/OI/O SecuritySecurityAudio/VideoAudio/Video DecodersDecoders Graphics &Graphics & DisplayDisplay ProcessingProcessing
- 7. * Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of otherss DHG IADHG IA SoCSoC Silicon Adoption MomentumSilicon Adoption Momentum Six Segments of Focus for Intel CableCable TVTV Digital TVDigital TV IPTVIPTVSatelliteSatellite ConnectedConnected A/VA/V BluBlu--RayRay Multiple Design Wins! Multiple Design Wins & Happening Faster Than Expected! Engagements on Track for Future SoC Concrete Product Development with Almost All Top CE Companies! Internet Direct to DTV is Happening Faster Than Expected! Multiple Design Wins! Multiple Design Wins! Toshiba Shown at CES! Multiple Design Wins! Samsung Shown at CES!
- 8. Strong Buzz from CES * Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of otherss
- 9. Key Trends for CE from CES2009 Widgets Coming to TV • Very clear that Internet is coming to televisions with all major CE OEMs showing some form of Internet services on TVs. • Strong Momentum for Widget Approach (Samsung, Toshiba, and LG) • Internet connectivity drives need for performance headroom. • Intel’s IA SoC is the ideal silicon for bringing Internet to TV! * Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of otherss
- 10. Update from Investor Day 2008Update from Investor Day 2008 IntelIntel’’s CE Market Opportunitys CE Market Opportunity • TAM/SAM Model Based on latest analyst data from end of Q3’08 and Q4 impact unclear1 • Blu-ray & IPTV Segments Somewhat Stronger2 • Economic Impact Seems to Be Impacting TV Purchasing Less Than PC Industry3 • Will Provide Updated TAM/SAM with Q1’09 forecast updates at Investor Meeting in MaySources: 1 : Intel DHG Forecast Model based on ABI, In-Stat, U&S 2007, DisplaySearch, & iSupply Data 2 : DisplaySearch and Nielsen, Q4’2008 3 : Forrester, “Consumer Spending in an Economic Recession”, January 5, 2009
- 11. Driving Value Consumers Willing to Pay More for Widgets on TV! • Research done after economic crisis began. • When exposed to how the Widget Channel could be incorporated into the TV experience, 76% of consumers said they found this somewhat or extremely valuable. • Surveyed how much more consumers would be willing to pay for the addition of Widget Channel to a new HDTV, Blu- ray player, and DSTB. When given specific incremental spending amounts between $25 and $85, there was between a 60% and 85% willingness to pay the premium with little variation in that willingness as the price went up. Source: Primary Research – The Diffusion Group, Q4’2008 * Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of otherss
- 12. Consumer Electronics Platforms Roadmap & Delivery Update 2007 IA CPU & Chipset Performance Internet Compatibility Software Ecosystem Intel® CE 2110 Media Processor Cost-Effective Integration AV Decoders 2008 2009+ Intel® Media Processor CE3100 Future IA SoCs Optimized for Segments 45nm & Intel® Atom™ Core Multiple Segments All products, computer systems, dates and figures specified are preliminary based on current expectations, and are subject to change without notice. Sodaville Blu-ray, IPTV, ConnAV Cable & Satellite Digital TV
- 13. Legal Notices This document contains information on products in the design phase of development. Intel processor numbers are not a measure of performance. Processor numbers differentiate features within each processor family, not across different processor families. See www.intel.com/products/processor_number for details. • Intel, CE 2110, CE3100, Core 2 Duo, and the Intel logo are registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. • Sodaville is a code name. • Copyright © Intel Corporation 2009. All rights reserved.
- 14. Risk Factors The above statements and any others in this document that refer to plans and expectations for the first quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. Many factors could affect Intel’s actual results, and variances from Intel’s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be the important factors that could cause actual results to differ materially from the corporation’s expectations. Current uncertainty in global economic conditions pose a risk to the overall economy as consumers and businesses may defer purchases in response to tighter credit and negative financial news, which could negatively affect product demand and other related matters. Consequently, demand could be different from Intel's expectations due to factors including changes in business and economic conditions, including conditions in the credit market that could affect consumer confidence; customer acceptance of Intel’s and competitors’ products; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers. Intel operates in intensely competitive industries that are characterized by a high percentage of costs that are fixed or difficult to reduce in the short term and product demand that is highly variable and difficult to forecast. Revenue and the gross margin percentage are affected by the timing of new Intel product introductions and the demand for and market acceptance of Intel's products; actions taken by Intel's competitors, including product offerings and introductions, marketing programs and pricing pressures and Intel’s response to such actions; Intel’s ability to respond quickly to technological developments and to incorporate new features into its products; and the availability of sufficient supply of components from suppliers to meet demand. The gross margin percentage could vary significantly from expectations based on changes in revenue levels; capacity utilization; excess or obsolete inventory; product mix and pricing; variations in inventory valuation, including variations related to the timing of qualifying products for sale; manufacturing yields; changes in unit costs; impairments of long-lived assets, including manufacturing, assembly/test and intangible assets; and the timing and execution of the manufacturing ramp and associated costs, including start-up costs. Expenses, particularly certain marketing and compensation expenses, as well as restructuring and asset impairment charges, vary depending on the level of demand for Intel's products and the level of revenue and profits. The tax rate expectation is based on current tax law and current expected income. The tax rate may be affected by the jurisdictions in which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the resolution of issues arising from tax audits with various tax authorities , including payment of interest and penalties; and the ability to realize deferred tax assets. The recent financial crisis affecting the banking system and financial markets and the going concern threats to investment banks and other financial institutions have resulted in a tightening in the credit markets, a reduced level of liquidity in many financial markets, and extreme volatility in fixed income, credit and equity markets. There could be a number of follow-on effects from the credit crisis on Intel’s business, including insolvency of key suppliers resulting in product delays; inability of customers to obtain credit to finance purchases of our products and/or customer insolvencies; counterparty failures negatively impacting our treasury operations; increased expense or inability to obtain short-term financing of Intel’s operations from the issuance of commercial paper; and increased impairments from the inability of investee companies to obtain financing. Gains or losses from equity securities and interest and other could also vary from expectations depending on gains or losses realized on the sale or exchange of securities; gains or losses from equity method investments; impairment charges related to debt securities as well as equity and other investments; interest rates; cash balances; and changes in fair value of derivative instruments. The current volatility in the financial markets and overall economic uncertainty increases the risk that the actual amounts realized in the future on our debt and equity investments will differ significantly from the fair values currently assigned to them. The majority of our non-marketable equity investment portfolio balance is concentrated in companies in the flash memory market segment, and declines in this market segment or changes in management’s plans with respect to our investments in this market segment could result in significant impairment charges, impacting restructuring charges as well as gains /losses on equity investments and interest and other. Intel's results could be impacted by adverse economic, social, political and physical/infrastructure conditions in the countries in which Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates. Intel's results could be affected by adverse effects associated with product defects and errata (deviations from published specifications), and by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust and other issues, such as the litigation and regulatory matters described in Intel's SEC reports.