Intel Sees Upbeat Results for Quarter

However, sales in Intels wireless group fell, indicative of the "deep hole" that Intel is climbing out of in communications, Bryant said. Intel lost market share in communications during the quarter, according to the companys own data.

In addition, North American sales grew by 11 percent, and Bryant noted there was no evidence that U.S. IT departments were increasing their purchasing budgets.

Overall, Bryant said that the average selling prices of Intels processors grew slightly, enough to be noticeable but not affect the companys margins.

Worldwide, the Japanese market led the pack. Sales in Japan increased by 73 percent, driven by sales of notebooks and camera phones.

However, Intel executives left one key question largely unanswered: when to expect Prescott and Dothan, Intels first 90-nanometer chips for the desktop and mobile markets. Analysts pressed Bryant about industry buzz that the company has had problems with its 90nm process. To date, Intel has said only that it will produce "revenue shipments" of the two chips during the fourth quarter.

"Im not going to dissect the [90nm] process on this call; the process is very healthy," said Paul Otellini, Intels president, on the conference call.

However, Otellini added, Intel has made some adjustments, advising OEMs that the chips will generate more heat than originally expected. The company did so to allow it to ramp the Prescott to faster speeds over its expected lifetime, he said.

"We ended up changing the thermal target for systems for Prescott as we got silicon out ... and that required us to change the thermal envelope for system models slightly," Otellini said.

Editors note: This story has been updated since its original posting to include details and discussion from Intels conference call with analysts Tuesday afternoon.

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