Intel Growth Fueled by Data Center Business
With PC shipments continuing to decline worldwide, the chip maker is looking to data centers, IoT and other areas to offset those losses.Intel is continuing to rely more on its data center business and other newer product segments to help offset the continued sales declines in its PC processor unit. However, even the Data Center Group—which saw revenues hit $4.1 billion in the third quarter, a 12 percent jump over the same period last year—had continued weakness in the enterprise segment, though that was offset to some degree by growth in the cloud business. What the quarterly financial numbers show is a company that is adapting to the rapid changes that are roiling much of the tech industry, with the growing importance of not only the cloud business, but other areas such as memory and the Internet of things (IoT). For a business whose history has been so tightly coupled to the PC market, these other segments now account for about 40 percent of Intel revenues, according to CEO Brian Krzanich. Overall, Intel in the third quarter generated $14.5 billion in revenue –about flat year-over-year—and a net income of $4.2 billion, a 6 percent drop. The Client Computing Group—which includes PCs as well as mobile devices like smartphones and tablets—saw revenue drop 7 percent year-to-year, to $8.5 billion. Revenue for the IoT Group rose 10 percent over the same period last year to $581 million, while revenue growth was flat for the software and services business, with sales hitting $556 million.
Though PC shipments continue to decline globally—in the last quarter by 7.7 percent to 10.8 percent, according to analysts with Gartner and IDC—Krzanich said he was optimistic about the future of the PC business driven by Microsoft's new Windows 10 operating system and Intel's new sixth generation Core "Skylake" processors.