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No. 1 chipmaker Intel ( INTC ) remains in the running for an Apple ( AAPL ) iPhone 7 chip even as the smartphone-maker’s iPad Pro continues to gouge PC sales, a Summit Research analyst said Tuesday. Financially, gaining the iPhone 7 modem would be a “non-event,” accounting for $200 million in sales and 2 cents earnings per share ex items per quarter, Summit Research analyst Srini Sundararajan wrote in a research report. But it would allow Intel to undercut No. 3 rival Qualcomm ( QCOM ) which, teardowns show, has supplied the iPhone modem in at least the past four flagship iterations. Qualcomm has been an iPhone supplier since iPhone 4S, whereas Intel has never supplied an iPhone chip. “The implications from a prestige point of view — getting a socket into the iPhone, is likely to be seen as an achievement for Intel and a loss for Qualcomm,” Sundararajan wrote. ‘Dreadful’ January, ‘So-So’ February In midday trading on the stock market today , Intel stock was down a fraction following the death of former longtime CEO Andrew Grove, 79, a Silicon Valley and tech visionary largely credited with building the company into a powerhouse. He left as CEO in 1998 and left the board in 2004 — both moves precipitated by health issues — but remained an advisor. Sundararajan cut his price target on Intel stock to 38 from 40 on “PC doldrums,” but reiterated his buy rating. Sundararajan is the third analyst since February to cut his Q1 estimates for Intel on the weakening PC unit. Taiwanese PC shipments were “dreadful” in January and “so-so” in February, Sundararajan wrote. And “Apple’s release of the smaller iPad Pro and iPad Pro earlier should continue to cut incrementally into PC sales.” But Sundararajan doesn’t expect Intel to pre-announce new guidance . Intel previously guided to $14.1 billion in sales, plus or minus $500 million, suggesting 52 cents EPS ex items. That would be up 10% and 27%, respectively, vs. the year-earlier quarter. “To a certain extent, we feel that Intel’s mentioning weakness in China was an accurate presaging of what was to come, so we do not think that Intel’s guidance is likely to be that far off from actual results,” he wrote. Sundararajan cut his Q1 views to $13.8 billion and 45 cents vs. earlier expectations for $14.3 billion and 53 cents. He notes that Intel anticipates about $400 million in revenue from its completed Altera acquisition and an extra-week bump. The consensus of 46 analysts polled by Thomson Reuters models $13.96 billion in Q1 sales and 49 cents EPS minus items, up a respective 9% and 20%, on a year-over-year basis. For the year, Sundararajan now sees $57.9 billion in sales and $2.35 EPS minus items, down from $59.9 billion and $2.50. On average, analysts expect $58.77 billion and $2.40, up 6% and 3% vs. the year earlier. Scalper1 News
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