Feeds

Intel to get whacked in Q3 by PC slowdown

Competitive pressures, too?

Mobile application security vulnerability report

Wall Street got a shock this morning as chip maker Intel cut its guidance for the third quarter ending in September.

In a statement, Intel said that it was now expecting revenues to be somewhere between $10.8bn and $11.2bn, significantly lower than the $11.2bn to $12bn guidance that the company gave Wall Street back on July 13 when it reported its financial results for the second quarter. Ironically, Paul Otellini referred to that as "the best quarter in the company's 42-year history," and Intel beat Wall Street expectations for revenues and profits. It now seems pretty clear that PC and server makers might have been a little too exuberant in the chip and chipset buying in Q2 as they thought the IT market had recovered a bit more than it actually has.

"Revenue is being affected by weaker than expected demand for consumer PCs in mature markets," Intel said in its statement. "Inventories across the supply chain appear to be in-line with the company's revised expectations."

"The impact of lower volume is being partially offset by slightly higher average selling prices stemming from solid enterprise demand," it added.

As El Reg has previously reported, market watcher IDC calculated that PC shipments rose by 22.4 per cent in the second quarter, to 81.5 million units. IDC had been projecting that consumer PC spending will "remain healthy" but slow as 2010 progresses, and businesses will grow their PCs budgets as they do their cyclical replacements over the next couple of years.

Gartner said that the PC market jumped in the second quarter, too, with shipments up 20.9 per cent, with 82.9 million machines out the door. Microsoft, which is very keen on a Windows 7 upgrade cycle, was this month poo-pooing the idea that the PC market would slowdown in the second half of this year.

iSuppli, which tracks semiconductor sales, has been expecting worldwide chip sales to grow significantly this year - up 35.1 per cent, to $310.3bn. But that is because so many devices use chips these days and there are product shortages for them in many cases, which drives up revenues. Demand for PCs and servers were cooked into those iSuppli numbers, of course.

Intel also lowered its gross margin guidance by a couple of points, to between 65 and 67 per cent. Perhaps the Opteron 6100 processors for servers are getting a bit of traction in the market, after all.

As El Reg goes to press, Intel's shares are off a few pennies to $18.15 a pop. Wall Street either doesn't care or hasn't heard the news yet. ®

Boost IT visibility and business value

More from The Register

next story
Report: American tech firms charge Britons a thumping nationality tax
Without representation, too. Time for a Boston (Lincs) Macbook Party?
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Apple gets patent for WRIST-PUTER: iTime for a smartwatch
It does everything a smartwatch should do ... but Apple owns it
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
Child diagnosed as allergic to iPad
Apple's fondleslab is the tablet dermatitis sufferers won't want to take
Microsoft takes on Chromebook with low-cost Windows laptops
Redmond's chief salesman: We're taking 'hard' decisions
For Lenovo US, 8-inch Windows tablets are DEAD – long live 8-inch Windows tablets
Reports it's killing off smaller slabs are greatly exaggerated
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.