Feeds

Intel’s Otellini spots bottom on negative numbers

Enterprise break on recovery

  • alert
  • submit to reddit

The essential guide to IT transformation

Paul Otellini, Intel's president and chief exec, believes that: "We are seeing signs that a bottom in the PC market segment has been reached. I believe the worst is now behind us."

His comments came during a phone call with analysts and reporters Tuesday, during which chipzilla released its first-quarter financial results for 2009.

And seeing how bleak those numbers were, Intel investors and employees certainly hope he's right.

In the Q1 2009, Intel's revenue was $7.1bn (£4.8bn), which was down 13 per cent from the previous quarter, and down 26 per cent from the same period last year. Net income was even more dreary year-on-year: at $647m (£435m) it was down 55 per cent. However, giving some credence to Otellini's remarks, Q1 2009 net income was up 176 per cent from the woeful Q4 2008.

Think of it as a silver lining on a class-F5 tornado.

"Three months ago, we were sitting in a fragile global economic environment, and we had just come off of a horrendous Q4," he said. "Three months later we're still sitting in a fragile global economic environment... but our ability to look and plot some historical points has given us the confidence to essentially say that we've seen the bottom."

Otellini even went as far as to use the n-word - "normal" - saying that: "Desktop sales appear to have hit bottom first, and have followed more-normal patterns since early February. In notebooks, the length of the supply chain and higher levels of inventory took longer to work through, but now have returned to normal levels."

Lest you believe that Otellini was channeling Pollyanna, he did have some discouraging words about "the enterprise, [which is] keeping their wallets shut."

Although he contends that the server market is in "reasonable shape," enterprise acquisition of business-client desktops and notebooks "remains weak, reflecting constrained budgets and redeploymennt of older equipment."

But even here he saw a light at the end of the proverbial tunnel, noting that: "The installed base of enterprise notebooks is now over three-years average age, and will need to be upgraded as capital budgets free up."

When those budgets will free up, however, is not known. Joining Otellini on the call was Intel's chief financial officer, Stacy Smith, who said: "I predict enterprise will be weak for a while."

Translation: get used to the bottom - we're going to be here for the foreseeable future.

It's still an uncertain marketplace - so much so that Smith declined to make specific predictions, saying that: "Intel is not providing a revenue outlook at this time."

So much for normality.

Otellini also touched on some specific Intel product lines:

Nehalem: "If you combine the Core i7 and the Intel Xeon 5500 processors, this week Intel expects to ship its one-millionth Nehalem-based microprocessor," he announced. For those close-walleted IT folks, though, he had one bit of a warning: "You'll see us maintaining a premium-pricing profile for [the Xeon 5500 line] for a while."

Westmere: "Our 32nm process is very healthy, and shows great promise for us," he said. "We have pulled in Westmere, our first 32nm product family, and will now be shipping those products later this year. We have shipped thousands of Westmere samples to over 30 OEM customers already."

Larrabee: "We have first silicon. It's in debug now, and we're marching towards production of that product," he said, noting that both hardware and software tweaking was still in progress. "I would expect volume production of this product to be early next year.

ULV notebooks: "The big trend in notebooks this year, starting mid-year, is likely to be very well-designed thin and light notebooks... using ultra-low-voltage products," he said, referring to MacBook Air-class notebooks, not netbooks. "I think you'll see those at very attractive price points. Up to this point in time, those products have been sort of executive jewelry."

But for those made redundant during the current Meltdown, sexy notebooks won't take precedence over rent and food on the table.

Although Otellini boasted that Intel's "product-development machine is in high-gear", it's not yet clear who can afford to hop on for a ride. ®

Next gen security for virtualised datacentres

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?