When Brian Krzanich took over as Intel's CEO in May 2013, the global PC market was in the middle of a deep sales decline and the chip maker was desperately trying to gain a foothold in a booming mobile computing market that it had missed out on earlier.
Krzanich said he wanted Intel to learn from its mistakes in mobile by moving aggressively into such growth areas as the Internet of Things (IoT), cloud computing and wearables. Those areas all played a role in Intel generating strong financial numbers in 2014, especially record earnings in the fourth quarter, the CEO said during a conference call Jan. 15.
However, it was Intel's traditional strengths—data center servers and a stabilizing PC market— that most bolstered its 2014 numbers. Intel's Data Center Group, which was boosted by the growth in cloud infrastructures, saw revenues in the fourth quarter grow 25 percent over the same period in 2013, and 18 percent year-to-year. The PC Client Group's fourth-quarter revenues came in at $8.9 billion, a 3 percent increase over the year before. For all of 2014, the PC business saw revenues of $34.7 billion, an increase of 4 percent.
For the quarter, Intel generated $14.7 billion in revenues—a 6 percent increase year-over-year—and a net income of $3.7 billion, a 39 percent increase. The chip maker saw full-year revenues of $55.9 billion, also a 6 percent jump—and net income of $11.7 billion, a 22 percent increase.
"Intel is in a very different place today than we were just 12 months ago," Krzanich said. "We are participating in a broader range of devices and we are [growing] in emerging segments. These are the trends we'll build on in 2015, bringing us closer to our vision: If it's smart and connected, it does it best with Intel."
Looking forward, Intel executives expect revenue in the first quarter to come in at between $13.2 billion and $14.2 billion, while revenue for the entire year will grow in the mid-single digit percentage range.
IDC and Gartner analysts have been talking about the stabilization in the PC market since last year, after more than two years of sharp sales declines. They've noted several factors, including the saturation of the tablet space, Microsoft's ending support of Windows XP, businesses needing to refresh aging systems, falling prices, and new form factors, including two-in-ones. Intel has been a proponent of driving innovation in the space to create smaller, faster, and less expensive systems that come in a range of configurations.
In the second half of 2014, Intel released Core-M, the first of its 14-nanometer processors. The company followed up this month with the 5th Generation Core "Broadwell-U" chips, all of which will enable OEMs to make smaller and less expensive systems. The innovation will continue later this year with the release of Skylake, which will bring more features to the processors. The impact of such technologies on the PC space is significant, Krzanich said.
"The innovation and the options of the PC market have never been better," he said. "I'm feeling pretty good about where we are in the PC market."