SAN FRANCISCO—Intel Corp. Tuesday reported declines in first quarter sales and profit amid challenging PC market conditions, but said it still expects to grow sales moderately in 2013. Intel also cut its capital spending forecast for the year by about $1 billion.
Intel (Santa Clara, Calif.) reported first quarter revenue of $12.6 billion, down 7 percent from the previous quarter and down 2 percent from the first quarter of 2012. The company reported a net income of $2 billion, or 40 cents per share, down 17 percent from the previous quarter and down 25 percent from the first quarter of 2012.
Intel's first quarter sales were in line with consensus analysts' expectations.
In a conference call with analysts following the quarterly report, Intel executives said the company is pinning its hopes for the year largely to innovative new computing form factors, including the Intel specified Ultrabook, convertibles, tablets and touch- enabled notebooks. Executives acknowledged that the company's revenue from silicon in smartphones is still negligible and that the company is still in the design win stage.
Paul Otellini, Intel's longtime CEO who is retiring next month, praised the innovation taking place in the computing space, particularly among OEMs and Taiwanese ODMs. Otellini called the innovation currently taking place "as as revolutionary as anything I've seen in my time in the industry."
Stacy Smith, Intel's chief financial officer, said the company continues to make progress in smartphones in tablet. "First quarter tablet volume more than doubled from the fourth quarter and we expect it to double again in the second quarter," Smith said.
In the second half of the year, Intel plans to launch Bay Trail, its next-generation Atom SoC, which will extend the company's product line across tablet screen sizes and price points, Smith said.
Smith predicted that there would be Ultrabooks available during the 2013 holiday season that crossed below the $600 price point, long viewed as an important milestone that could spur consumer adoption.
The increasing popularity of tablets is clearly the dominant factor in the decline of PC sales, but I have to wonder if the release of Win8 didn't accelerate that decline.
Whether the Win8 critics are right or wrong or of old age or of a certain mindset doesn't change the fact that Win8 is not a big winner with desktop PC & notebook customers.
Thinking the Intel model requires high-ASP is a flawed assumption. It is supported by high margins. This is where the process line-size lead that Intel has allows them to compete at lower ASPs, because their cost is significantly lower than their competition's.
When they announced the S-1200 microserver processor last fall, they went to great pains to emphasize that they actually make MORE money on a rack full of the smaller, lower-ASP chips.
People who say that Win8 should not have removed "Start" button and should not have offered touch screen are probably of old age, or with mindset and fingers stuck at certain mode. How sad! These are the people who refuses to grow.
I wonder if you are among many of whom predicted the decline of Intel during the rise of AMD on 2005ish. Just don't accuse Intel of monopoly when Samsung and Nvidia get left behind by Intel this time around.
In my opinion, MSFT killed the PC market with Vista, then recovered with Win7, now killed it again with Win8. I was going to buy a laptop last xmas season, but could not find a new one without Win8. I finally found an old stock computer with Win7. There should be a non-touch screen alternative setup put into Win8. Call me obstructionist, but I find it a waste of time, unnecessarily having to learn something new that doesn't add to my productivity. Microsoft - you screwed up!
This comment is made as if only one semiconductor business model exist. Intel model different from Qalcomm, different from AMD, different from TSMC. The strong argument is that Intel's unique business model is not effective in the post-PC mobile area.
After a 20% price increase, a Samsung A6 processor costs $17.50 to Apple, die size 95.04mm2. The Intel Ivy Bridge-M-2 is 94mm2, and costs between $64 and $138. Your sweeping and dismissive comments are sad.
You do not seem to understand the semiconductor business model. The ASP means very little. It is revenue per wafer and profit per wafer what counts. Intel being ahead of everyone in process technology by at least one generation is well positioned to thrive in the coming years. Their Atom based SOC-s are more then a match to ARM based SOC-s and their advantage will grow in the coming years.
I agree. If I recall correctly, Otellini about a year ago was saying that $699 would be the mainstream price point. Now that they are talking $599 and even $499 for some models, I think this could have much more widespread appeal.
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