Menu
Intel profit falls as PC slump continues

Intel profit falls as PC slump continues

CEO Brian Krzanich expects the Windows 10 launch, along with Intel's upcoming Skylake processor, to generate "excitement"

A laptop with an Intel Core i7 processor, on show at Computex 2015 in Taipei

A laptop with an Intel Core i7 processor, on show at Computex 2015 in Taipei

Intel's revenue and profit both dropped last quarter as people held off on buying new PCs ahead of the Windows 10 launch later this year.

Revenue from Intel's Client Computing Group, which sells processors for desktops, laptops and smartphones, fell 14 percent from this time last year to $7.5 billion, the chip maker said Wednesday.

Its Data Center Group, which makes the Xeon server processors, performed better, but not well enough to offset the ongoing slump in the PC industry.

Intel's total revenue for the quarter ended June 27 was $US13.2 billion, down 5 per cent from a year earlier. Net income was $US2.7 billion, down 3 per cent.

Its revenue and profit both beat the modest expectations of Wall Street analysts, according to Thomson Reuters.

Revenue from the Data Center Group was up 10 percent year-over-year to $US3.9 billion, Intel said. Its sales into the Internet of Things market also expanded, to $US559 million.

But Intel gets most of its revenue from chips used in PCs, and that market isn't doing well. Worldwide sales were down 12 per cent last quarter, IDC said recently, in part because buyers are holding out for Windows 10.

CEO Brian Krzanich expects the Windows 10 launch, along with Intel's upcoming Skylake processor, to generate "excitement" in the PC market in the second half of the year, a company statement said.

It's unclear how big the Windows 10 effect will be, however. That's because Microsoft is providing the OS as a free upgrade to existing users, giving people less reason to go out and buy a new PC.

The slow PC market is also hurting Intel's smaller rival AMD, which warned last week that revenue this quarter would be lower than previously forecast. AMD is due to report its results on Thursday.

Both Intel and AMD have struggled to profit from smartphones and tablets, the fastest growing parts of the computing market.

Intel changed how it reports its financial results at the start of the year, making it harder to see how its smartphone business is doing. It used to break those numbers out separately, but it now rolls them in with laptop and desktop sales.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuesintelprocessorsfinancial resultsComponents

Featured

Slideshows

EDGE 2018: Kiwis kick back with Super Rugby before NZ session

EDGE 2018: Kiwis kick back with Super Rugby before NZ session

New Zealanders kick-started EDGE 2018 with a bout of Super Rugby before a dedicated New Zealand session, in front of more than 50 partners, vendors and distributors on Hamilton Island.‚Äč

EDGE 2018: Kiwis kick back with Super Rugby before NZ session
EDGE 2018: Kiwis assess key customer priorities through NZ research

EDGE 2018: Kiwis assess key customer priorities through NZ research

EDGE 2018 kicked off with a dedicated New Zealand track, highlighting the key customer priorities across the local market, in association with Dell EMC. Delivered through EDGE Research - leveraging Kiwi data through Tech Research Asia - more than 50 partners, vendors and distributors combined during an interactive session to assess the changing spending patterns of the end-user and the subsequent impact to the channel.

EDGE 2018: Kiwis assess key customer priorities through NZ research
Show Comments