New CEO says ultra- mobile market should offset slower PC sales
Chipmaking giant Intel Corp. put a brave face on the decline of the global PC sales earlier this year, saying it expected its own sales to grow. On Wednesday, it said sales will be flat.
Intel is hoping that sales of processors for servers, tablets and smartphones will compensate for the drop-off in PC sales.
“I’ve made it Intel’s highest priority to create the best products for the fast-growing ultra-mobile market segment,” said new CEO Brian Krzanich in a statement.
In a conference call, Krzanich said Intel had expected the PC market to perform better than it has so far this year. But the company expects sales of chips for data centers, cloud computing, high-performance computing and networking and storage applications to offset sluggish PC sales. In addition, Intel will accelerate development and delpoyment of future generations of the Atom chip, which can be used in tablets, phones and other devices.
“We’ll drive growth with an emphasis on Atom-based products,” Krzanich told investors. “We’ll move the Atom even faster to the leading edge of silicon technology.”
The Santa Clara, Calif., chipmaker said revenue for the April-to-June period was $12.8 billion. That was down 5 percent from a year ago and just below the company’s projections and analyst expectations of $12.9 billion. Net income for the quarter was $2 billion, or 39 cents per share. That was down 29 percent from a year ago.
For the first six months of this year, Intel’s revenue is down 3.8 percent, from $26.4 billion in 2012 to $25.39 billion. Net income has dropped 27 percent, from $5.56 billion to $4.04 billion.
Worldwide shipments of personal computers fell 11 percent in the April-June period, according to data from research firms Gartner and IDC, as people continued to migrate to mobile devices. It’s the fifth consecutive quarter of decline. Previous sales declines were related to recessions; this is the first time the PC is yielding to new devices.
Intel did get one of its chips into an Android-based Samsung tablet, replacing a chip based on technology from Britain’s ARM Holdings PLC.
One of the company’s largest chipmaking plants is in Rio Rancho, where it employs about 3,300 people.