Despite a weakening consumer demand for PCs, Intel still saw a record high in revenues in the third quarter, thanks to spending by businesses and in emerging markets.
Intel officials in August warned the industry that
weakening
consumer PC sales in the third quarter threatened what had been an
extremely strong year for Intel and its competitors.
However, corporate spending on technology helped Intel grow
revenues to $11.1 billion, the first time they had reached the $11 billion
mark. Revenues grew 18 percent over the same period last year, while earnings
rose from $1.86 billion in the third quarter of 2009 to $2.96 billion.
In a conference call with analysts and journalists Oct. 12,
both Intel CEO Paul Otellini and CFO Stacy
Smith said that while consumer demand in the United
States and Europe
continued to be weak, corporate spending grew, as did demand in emerging
markets.
The reduced demand among consumers led other chip makers-Advanced
Micro Devices and Texas Instruments among them-to lower third-quarter
expectations. AMD is scheduled to release
its quarterly earnings Oct. 14.
Despite the weakened consumer spending, Intel's numbers from
the third quarter continued a string of record-setting quarters, fueled by
sales in both its traditional PC and server processor businesses as well as the
company's growing initiatives in new areas such as embedded systems and mobile
devices.
Intel officials expect that trend to continue. They expect
revenue to come in around $11.4 billion, give or take $400 million. Otellini
was particularly high on the potential of Intel's upcoming "Sandy
Bridge" processor, a
32-nanometer chip that offers integrated graphics, about 1 billion transistors
and a throughput rate that is five times faster than current chips.
Otellini and Smith said early demand for the processor-which is
scheduled to appear in systems in early 2011-has been good. Sandy
Bridge represents "the largest
increase in computing performance in our history," he said during the
call. "Early demand is much higher than anticipated."
Otellini also gave his strongest statements yet regarding the
growing tablet PC market and how he sees Intel's role in it playing out.
While tablets may take some business away from the "edge"
notebook market, he said, both the tablet and the notebook markets will
continue growing at healthy paces. He noted a similar trend when netbooks hit
the market for the first time three years ago.
He also said he expects Intel's Atom platform-particularly the
upcoming "Oak Trail" chip-to help drive the adoption of the Intel
Architecture in tablets and other small form factors.
In addition, he and Smith talked about the strength of the Atom
platform in the embedded market, most recently in its use in the Google TV
offering.
"Smart TVs are an example of how Intel Architecture can
bring a great computing experience not just in PCs but in any device that
connects to the Internet," Otellini said.
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