Business

Pathetic PC sales just cost us a BILLION dollars, cries Intel

No wonder Chipzilla is chasing internet-of-things, mobile chips

Intel has lowered its revenue forecast for the first quarter of its fiscal 2015 by nearly a billion dollars, citing a weaker than expected PC market.

While previously the chipmaker had said it expected to bring in $13.7bn (£9.21bn) during Q1, plus or minus $500m, on Thursday it revised that estimate to $12.8bn (£8.6bn), plus or minus $300m.

"The company believes the changes to demand and inventory patterns are caused by lower than expected Windows XP refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe," Intel said in a statement.

The news is an inauspicious start to the New Year for Chipzilla, which has struggled to adapt to changing market conditions, in particular the shift of the consumer computing landscape from PCs to mobile devices.

Intel's PC Client group – its single largest reporting segment – grew its sales by just 4.2 per cent in 2014. Meanwhile, the firm's Mobile and Communications segment saw its revenues plummet by 85.3 per cent.

Not that mobility was ever Intel's strong suit, given that the market for processors for smartphones and tablets is overwhelmingly dominated by ARM. In fiscal 2014, the Mobile and Communications group accounted for just 0.4 per cent of Intel's total revenues.

Intel CEO Brian Krzanich has reportedly opted to whistle past the graveyard by rolling PC Client and Mobile and Communications into a new reporting segment to be called Client Computing.

For the moment, however, it looks as though Intel won't have much good news when it reports its earnings next month.

"All other expectations have been withdrawn and will be updated with the company's first-quarter earnings report on April 14," Intel said.

Investors, understandably, were not pleased, sending Intel shares down 4.7 per cent on the news. ®

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