Intel CEO: PC Growth Continuing Into 2011

Intel CEO Paul Otellini is predicting a robust PC market next year, driven by strong enterprise demand.
By James Rogers ,

SANTA CLARA, Calif. (

TheStreet

) --

Intel

(INTC) - Get Report

CEO Paul Otellini is predicting a robust PC market next year, driven by strong enterprise demand.

"We believe that there will be continued strong growth in the PC market and adjacent markets like servers," he said during a presentation at the Barclays Capital Global Technology conference in San Francisco. "We're foreseeing another strong year."

Intel expects the PC and server market to grow in the mid-teens next year, continuing the chipmaker's recent momentum. "This year we predicted 17% growth, and it's coming in at 17%," he added. "We're seeing a very strong corporate refresh."

The Intel CEO's bullishness will be music to the ears of

Microsoft

(MSFT) - Get Report

, as Otellini cited Windows 7 as a major catalyst for the PC refresh.

Intel is also gearing up for a major product launch and plans to unveil its new processor, dubbed Sandy Bridge, at the Consumer Electronics Show (CES) in January. Initially focused on PCs and laptops, Sandy Bridge is Intel's first processor to contain integrated graphics capabilities.

The successor to Intel's 32-nanometer Nehalem chip, Sandy Bridge has been touted by Intel as providing the

biggest computing performance boost

in the company's history. Otellini said that initial feedback from PC and laptop makers has been positive. "Even our most demanding customers are excited by the graphics capabilities," he said.

Intel seems to have side-stepped the economic woes that

Cisco

(CSCO) - Get Report

mentioned in its most recent quarterly earnings report. Last month, Intel

announced plans to hike its dividend

, citing its best year ever.

"The core business that we serve, which is PCs and servers, doesn't show any signs of dying," said Otellini on Wednesday. He also mentioned plans to build a smartphone chip.

Intel is relatively late to the smartphone market, where it faces stiff competition from

Qualcomm

(QCOM) - Get Report

, whose products already power many mobile devices. Undeterred, Otellini said that Intel is preparing to launch its Medfield smartphone chip next year. "We will see smartphones from premier brand vendors in the second half of 2011 with Intel silicon inside of them," he said.

Shares of Intel closed up 24 cents, or 1.11%, to $21.82 on Wednesday, outpacing the modest advance in tech stocks which saw the Nasdaq gain 0.24%.

--Written by James Rogers in New York.

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