Intel sales down 3% on falling PC shipments

Falling PC shipments dragged chipmaker Intel’s revenues down 3% to $13.5 billion in the final quarter of 2012, the company revealed yesterday. Profit for the quarter was $2.5 billion, down 27% year-on-year.

The company’s PC division saw revenue fall 6% year-on-year to $8.5 billion. This was roughly in line with the 6.4% drop in global PC shipments recorded by IDC for the last quarter of 2012.

"The PC market segment was impacted by the growth of tablets," Intel CFO Stacy Smith told investment analysts.

Intel CEO Paul Otellini argued that tablets would pose less of a threat in future as hybrid devices, that combine tablet and laptop features, take off. "It’s no longer necessary to choose between a PC and a tablet. Convertibles and detachable, combined with Windows 8 and Touch, provide a two for one, no compromise computing experience."

A decline in PC chip sales was almost inevitable given the state of the PC market and Intel’s dominant market share. More troubling, perhaps, is the fact that its Architecture division, which includes its Atom mobile chip range, drop 7% to $1 billion during the quarter.

Intel’s data centre division fared better with 4% growth to $2.8 billion. CFO Smith said that "a richer mix of products and significant growth in the internet cloud segment of our business was partially offset by weakness in the enterprise server market," said Stacy Smith, Intel’s chief financial officer and executive vice president.

"The fourth quarter played out largely as expected as we continued to execute through a challenging environment," Otellini said. "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."

The company predicted "low single digit percentage" revenue growth for 2013. Earlier this week, IDC said that the PC microprocessor market will grow by just 1.6% this year.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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