Windows hit by PC decline but Intel riding high
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Sales of Windows operating system hit by "softness" in PC market, says Microsoft, but Intel reports record year
The once-universal combination of Intel chips and Microsoft's Windows operating system has come under increasing competition from alternative end-user computing platforms in recent years.
But while Microsoft's Windows business seems to be suffering as a result, Intel has gone from strength to strength, financial reports from the two companies revealed this week.
In its full 2011 financial year, Intel saw revenues increase 24% to $54 billion, the company reported today. Surprisingly, given widespread predictions of the 'death of the PC', this was driven by a 17% sales increase for the company's PC client group.
Intel's CFO Stacy Smith said the growth in the PC unit reflected "continued strength in emerging markets as rising incomes increased the affordability of personal computers and on strength from the enterprise market segment."
The company's data centre group grew 7% to $10.1 billion for the year "as the explosion of devices that compute and connect to the internet drove the build out of the
cloud infrastructure," Smith remarked.
Intel has still not cracked the mobile device market, however. Sales of its mobile device chip Atom fell by 25% to $1.2 billion. Smith said this was due to "lower demand for netbooks".
Over the last two years, during a period of significant disruption in some of its core markets, Intel has nevertheless grown revenues by $20 billion.
Sales at Microsoft's Windows division, meanwhile, fell 7% year-on-year in its more recent financial quarter.
"The PC market was challenged this quarter, with particular softness in the consumer segment," said Microsoft's chief financial officer Peter Klein. "We expect revenue to continue to be impacted by market dynamics similar to the past several quarters."
Overall, Microsoft's revenue rose by 5% during the quarter to $20.9 billion. Its servers and tools division grew 11% to $4.7 billion – just overtaking the Windows unit.
