LONDON Ė Intel Corp. has lowered its forecast for its third quarter revenue and said that it will reduce capital spending for 2012 below the previous minimum estimate of $12.1 billion. In a statement Intel put the lowered revenue forecast down to weak demand due to "a challenging macroeconomic environment."
Intel said it is now predicting 3Q12 revenue of between $12.9 billion and $13.5 billion, compared to the previous expectation of between $13.8 billion and $14.8 billion. The change is a reduction of 7.7 percent in the mid-point of the forecasts.
Intel said that its customers are reducing inventory in the supply chain, in contrast to the normal growth in third-quarter inventory in advance of the equipment builds for the holiday buying season. Intel said there is softness in the enterprise PC market segment; and demand in emerging markets is slowing. However, the data center business is meeting expectations.
The company said that its estimates for R&D and marketing, general and administrative spending in 2012 remain unchanged but that its full-year capital expenditure is now expected to be below the previous outlook of between $12.1 billion and $12.9 billion. Intel said it would accelerate the re-use of existing equipment for the 14-nm manufacturing process node.
Currently, Intel cannot compete in low margin business...it's just not in their corporate DNA. They spend huge amount of money wastefully because they sell parts at a few hundred dollars each, try selling for a tenth of that and it changes their entire manufacturing model. So they are stuck, keep trying to create high margin business at low volume and watch sales stagnate (at a likely high level) or try to get into low-cost, low power mobile business at high volume. I argue that everything from their payroll to their R+D to their Fab infrastructure would have to be overhauled drastically to compete with not only ARM but the companies that make ARM chips like TSMC. And I don't see intel as nimble enough to pull that off.
I am more optimistic on electronics industry.
Agreed Intel should of said "My revenue is decreasing since (i) Intel only sold miniscule ~100K smartphones since my Atom only runs Android 2.3 and is only at best on part with 3 year old Arm9 and (ii) Intel does not even have an LTE chip yet to market and (iii) Intel does not have any tablet sales (even though we have talked about having 20-30 tablet design wins for the past 2 year)
Yes "exceptional strong" iphone 5 sales is just a prediction not a fact. We will know shortly. Data I see in supply chain suggest OEMs are building product assuming
(1) iphone sales in Q3/Q4/2012 over 2011 will show strong unit growth
(2) PC sales (laptop,desktop, netbook) will show a year over year decline (even when compared to a weak Q4/2011 due to disk drive shortage)
my point being I don't simple buy Intel's "macro environment" excuse. I think the slow sales result from poor product improvement. Have netbooks even improved in last 3 years? same for sandy vs ivy laptops? Just shocking after you look at how much intel spent to make the new products