Showing posts with label Intel. Show all posts
Showing posts with label Intel. Show all posts

Friday, January 18, 2013

Intel sales, profits slide for 2012, but data center business growing


Intel saw its sales and profits drop in 2012 as the company was hit by slower demand for personal computers and its continued inability to make it big in the smartphone and tablet markets, although its data center business continued to grow.
The world's biggest chip maker reported revenue of US$53.3 billion for the year, down 1.2 percent compared with 2011, and posted net income of $11 billion, down 15 percent. Full-year revenue from its PC client division, which accounts for more than half its revenue, fell 3 percent year-on-year.
Intel also reported its fourth-quarter results on Thursday. Revenue slipped 3 percent and net income was down 26 percent from the final quarter of 2011, and while earnings per share slipped from $0.64 to $0.48, they were $0.03 above a consensus estimate from analysts polled by Thomson Financial.
The root of Intel's PC client problems lies in the declining market for PCs, where it has traditionally been the market leader, and the rise in popularity of tablet computers, where it faces much stronger competition.
Worldwide PC shipments fell 5 percent in the last three months of the year compared to the same period of 2011, according to an estimate from Gartner. The market amounted to 90.1 million units, it said.
Much of the drop is being blamed on tablet computers, which rather than emerging as a new class of machine that takes a place in the home between smartphones and PCs, is becoming a replacement for a PC, said Gartner.
In the tablet market, Intel faces competition from companies like chip makers relying on chip designs from competitor ARM.
However, Intel's data center business recorded better results. Sales rose 6 percent to $10.7 billion as demand for its server chips climbed.
"We made tremendous progress across the business in 2012 as we entered the market for smartphones and tablets, worked with our partners to reinvent the PC, and drove continued innovation and growth in the data center," said Paul Otellini, Intel president and CEO, in a statement.
"As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing," he said.
For the coming year, Intel said it expects to see sales rise in the low single-digit percent range.
Some of the company's hopes for 2013 stem from new chips it plans to release for laptops, tablets, and smartphones, Otellini said in a conference call with analysts.
"Looking ahead, I am exited about a strong pipeline of products coming to market," he said.
Intel plans to launch its Haswell chip in the first half, a new laptop processor that will deliver "the largest generation-to-generation battery life improvement in Intel's history," said Otellini. The executive said the new chip should help its PC partners produce thinner and lighter computers with longer battery life.
It also expects to see more Intel-based tablets shipping beyond the 10 that are already available. And the number of smartphones based on Intel chips will expand beyond the seven devices currently available, said Otellini.
Intel's new chips will be "extremely competitive with ARM designs," he said.
Intel also plans to launch its first Xeon and Atom chips produced on its leading-edge 22-nanometer manufacturing process targeted at the data center market.
Those new chips should return the data center group to double-digit percentage growth this year, Intel CFO Stacy Smith said during the conference call.
In after-hours trading, the company's stock on the Nasdaq was trading at around $21.60 per share at the time of this report, down from its close at $22.68.
Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address ismartyn_williams@idg.com

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Monday, November 19, 2012

With Intel's Otellini phasing out, new CEO may bring fresh mobile focus


Intel CEO Paul Otellini is getting ready to leave the company, and analysts say this could be a good change for the world's largest chip maker.
Intel announced on Monday that Otellini, 62, will retire in May after nearly four decades with the company. The company's board of directors will conduct a search for his replacement.
Intel CEO Paul Otellini gives a keynote address during the Consumer Electronics Show in Las Vegas in January 2012. (Photo: Steve Marcus / Reuters)
Whoever takes over as Intel's next CEO will face a daunting job. The company has been struggling to find its way into the burgeoning mobile market and faces tough competition from Arm Holdings, whose processors and technologies are widely used in mobile devices. The company has also been challenged by the depressed PC market.
While most industry analysts say Otellini is leaving the company of his own volition, Ken Dulaney, an analyst with Gartner, Inc., said other issues could have influenced his decision.
"Anytime this type of thing happens, it's a bit of a surprise, but he's been there a long time," Dulaney said. "And there are other factors that may be a 'slight' influence, such as the decline in PC shipments and the fact that Intel has missed the growth in mobility in categories such as smartphones."
However, Dulaney noted, Intel is a very strong company with top-of-class manufacturing and a particularly strong server business. With that strong base, new leadership could be a welcome change, he said.
Dan Olds, an analyst with The Gabriel Consulting Group, said he's waiting to see who's on Intel's short list for the CEO position before commenting on Otellini's departure.
"I don't think it's necessarily bad, or good, news," he said. "It definitely means change, and some uncertainty, which is disruptive, but, Intel is fighting on a number of fronts and could probably use the shot in the arm that a new leader can bring."
With about six months to prepare for the big leadership transition, Intel is in a good position, according to Charles King, an analyst with Pund-IT, Inc.
"Today's announcement begins an orderly preparation for his departure, with the Intel board having plenty of time to search, vet and choose a replacement," he added. "This is diametrically opposite from instances where CEOs are shown the door without warning or even a prospective replacement standing by."
It also means the company's board should have time to find a new leader who has a firm grasp of mobile technologies and the expanding mobile market.
However, a new leader, whether well-versed in mobile or not, may not change the company, or its future direction, all that much, said Patrick Moorhead, an analyst with Moor Insights & Strategy.
Intel is such a strong company with a new mobile strategy that the departure of one CEO and the entrance of another shouldn't alter its course much, Moorhead said.
Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is sgaudin@computerworld.com.
Read more about it leadership in Computerworld's IT Leadership Topic Center.

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