5 Questions Partners Want Answered On Intel's Q2 Earnings Call

Inquiring Minds

Intel has kept its product lineup fresh this quarter by rolling out its new Xeon scalable server processor platform for the data center, as well as its new enthusiast Core X platform for high-end gamers – but the chip giant also faces increased competition from other vendors, including AMD, ARM and Qualcomm.

Analysts expect the Santa Clara, Calif.-based company to report earnings of 68 cents a share, according to a consensus of Thomson Reuters analysts, up 15 percent from 59 cents in the same quarter a year ago.

As Intel reports second-quarter earnings, here's what partners want to know from CEO Brian Krzanich.

What's going on with Intel's IoT business?

Intel's Internet of Things business has undergone massive changes over the past few months – the company revealed in a series of product updates in June that it is axing its Edison, Galileo and Joule IoT compute modules. Meanwhile, according to a report two weeks ago, Intel also eliminated its wearables division in 2016, an anonymous source told CNBC.

While Intel said in a statement that it is continuing to invest in its IoT business – which in the company's first quarter of 2017 grew 11 percent over the year-earlier quarter – partners want to know if the company is shifting its focus and how it is approaching the IoT market.

How will Intel deal with new pressure on the high-end client compute market?

Partners want to see whether Intel has a call to arms for the channel around its enthusiast products – particularly as competition increases in this space. Intel and AMD have been sharpening their focus around the enthusiast market. While Intel in the spring launched its Core X platform to equip gamers in the enthusiast segments with extreme performance and mega-tasking capacities, AMD in March came swinging back with its own set of new enthusiast processors.

AMD Thursday launched three new processors that will up the ante for Intel's seventh-generation Core products, both in price and performance.

What does Intel have in store for its data center?

Partners were excited when Intel in July rolled out its new Xeon scalable server processor platform, which is aimed specifically at data center applications with the new mesh-based Purley architecture to reduce latency at high core counts.

However, Intel is also facing increased pressure in the data center market – AMD recently introduced its Epyc platform, which marks AMD's return to the server market after a four-year hiatus. It consists of nine 7000 processors that boast a larger memory bandwidth and broader array of input/output lines.

What's going on with Intel and Microsoft?

Intel in June released a blog post that served as a warning for companies emulating its proprietary x86 instruction set architecture without its permission – a week after competitor Qualcomm disclosed its intent to provide x86 emulation on Microsoft's Windows 10 ARM-based PCs.

While Intel and Microsoft have had a longstanding partner relationship around Windows 10 devices, Qualcomm said its Snapdragon 835 processors will power Windows 10 devices from OEMs including HP, Asus and Lenovo. Partners want to hear more about how Intel is dealing with competition from other vendors around Windows 10 devices.

Will there be continued channel changes and restructuring in the future?

Partners want updates on how Intel is continuing its restructuring efforts and whether the company will see any changes in the coming year.

In 2016, Krzanich shocked the industry with the news of massive layoffs and a major restructuring initiative to tighten focus on "areas of growth." As part of this initiative, the company said it would cut 12,000 jobs globally -- about 11 percent of its workforce – as well as restructuring efforts to pivot its focus from the PC market to the lucrative data center and IoT markets. In late 2016, Intel disclosed that the total restructuring cost would be $2.3 billion.