Intel to get whacked in Q3 by PC slowdown
Competitive pressures, too?
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. ®
Am I naive? Is being out by around 10% a huge error margin? They made around $10bn profit so it's not like there was a huge risk involved. How much accuracy is required before you don't get criticised for bad forecasting? Meh. They said they thought they'd make $11bn and came in with $10bn - am I missing something here?
The $10.8Bn figure stated in the article is revenue, not profit... profit for intel is usually around $1.45Bn to $2Bn, and with the amount of share holders to feed, the loss of 10% is huge, hopefully this trend will continue and intel will go broke, but i'm not holding my breath...
Upgraded my PC, but still have old one.
My current PC is based on the GA-MA770-UD3 rev 2.0 M'brd, Phenom 2 X2 550BE and HD4850 Gfx card.
I use it for gaming and as a media centre, including watching/recording HD channels via a VideoMate S350 satellite card.
My previous PC (which I still have, but is now unused) is based on the GA-7N400 Pro2, Athon XP 2500 and AGP GeForce 6600GT.
To play modern games and smoothly watch HD channels such as BBC HD I needed to upgrade.
Also, for storage, the GA-7N400-Pro2 only has 4 IDE channels and 2 SATA 150 ports.
It still works perfectly OK so I think it may be usefull as a file server.
If i remember correctly, I could never manage to get the CPU temp below about 45 C at stock speed with a lapped Thermalright SLK900. I think this was because the CPU socket only had the plastic clips around it so larger heatsinks that screwthough the MB were not compatible.
By comparison my OC'd to 3.7Ghz X2 550BE has never gone above 31 C with a Scythe Mugen 2.
I used my old PC for many years and I expect my current system to last the same if not longer.
I would buy Computers
With no operating system, as long as they were warranted compatible with GNU/Linux (Ubuntu in my case). Easy sale of two, if not three. Failing their availability (what's new?), I will be perfectly happy with my existing kit. It runs well on Ubuntu anyway.
USB3? or ARM
USB3 is not significant. Intel's lightpeak may be better. for storage eSata? Networking 1 Gigabit Everything else USB2 or firewire?
Maybe people spending the money on feature/smart phones, Satnavs, PMP, MID, pads/slates etc all ARM based. Not just iThings from Apple.
Also with lower spec laptops and netbooks that were on a race to bottom on price do people with working laptops need to buy a new one anymore? It's not like 10 years ago.
Mines the one with an old Archos 605 WiFi and Nokia E65 smartphone in the pocket. Hold on while I pack my 8 year old 1.8Ghz 1600x1200 laptop.