Close
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Latest News
    • Mobile
    • PC Hardware
    • Servers

    Intel Grows PC, Data Center Businesses, but Mobile Falls

    By
    Jeff Burt
    -
    July 16, 2014
    Share
    Facebook
    Twitter
    Linkedin
      Intel CEO Krzanich

      Intel’s financial fortunes continue to be boosted by a rejuvenated PC market and an increasingly strong data center business, as the chip maker lays out its plans to bolster lineups for servers, desktops and notebooks.

      After three years of contracting sales in the wake of Apple’s initial release of the iPad, recent PC shipment and revenue numbers from analysts and vendors have indicated a stabilization in the market, welcome relief to companies like Intel, which have been battered by the declining worldwide PC sales.

      Intel officials in April said they were seeing a slowdown in falling PC sales in the first quarter, and last month indicated that demand for systems was better than expected. On July 15, Intel executives announced second-quarter financial numbers that included 8 percent growth in revenues over the same period in 2013 and a 40 percent jump in net income.

      Leading the way were the PC Client Group, which saw a 6 percent increase in revenues, and the Data Center Group, with a 19 percent jump. Revenues for the company’s nascent Internet of Things Group increased 24 percent. Such numbers help give cover to Intel’s struggling mobile business, which saw revenues fall 83 percent over the same time last year, as the chip maker continues to struggle to gain traction against low-power chip designer ARM and its range of partners, including Qualcomm, Samsung and Texas Instruments.

      During a conference call with analysts and journalists to discuss the second-quarter numbers, CEO Brian Krzanich said there are a number of factors contributing to the revitalization of the PC market, from Microsoft’s ending of support for Windows XP operating system in April to businesses refreshing their aged fleet of systems to consumers—who at one time gravitated to tablets at the expense of PCs—showing interest in new, low-cost form factors, including 2-in-1 systems. Krzanich estimated that there are about 600 million PCs in the world that are at least four years old.

      “We are seeing clear signs of a refresh in the enterprise and small and medium businesses,” he said.

      Krzanich said he expected PC sales to remain strong through at least the rest of the year. Intel is forecasting revenue growth for 2014 to be around 5 percent, higher than previous expectations.

      Jack Gold, principal analyst with J. Gold Associates, backed up the CEO’s contention in a research note, saying Intel’s revenue growth in both notebooks (9 percent) and desktops (8 percent) was not surprising, given the expected refresh of older systems among enterprises and business users.

      “We expect the PC market to continue to grow for at least the next 3 quarters as more machines are upgrades/replaced, and the investment in new tablets continues to taper off with increasing saturation,” Gold wrote.

      During the conference call, Krzanich and CFO Stacy Smith talked about upcoming chip releases that they expect will continue to push Intel’s efforts in PCs, servers and the mobile space. New Xeon E5 server chips codenamed “Grantley” and based on the “Haswell” architecture will start appearing in systems this quarter, they said. In addition, PCs powered by the delayed 14-nanometer “Broadwell” processors will hit the market by the holiday season, they reiterated.

      Other upcoming chips for the year include “Cherry Trail” for tablets, which will ship by the end of the year, and “Broxton,” the next-generation low-power Atom chip. Next year, Intel will release Skylake, for PCs and tablets, in 2015, though neither Krzanich nor Smith were clear on exactly when it would launch. The CEO indicated that much of the decision will be determined by how ready system makers are for the chip.

      Krzanich and Smith said that despite the disappointing revenues for the mobile business, they are encouraged by what is coming. A key will be the upcoming SoFIA systems-on-a-chip (SoCs), which will be the first for Intel to include an integrated wireless modem. Currently, Intel sells chips with discrete modems, but integrating modems onto the chip will help device makers create smaller and cheaper tablets and smartphones.

      Integrating the modems onto the chip will be a significant step for Intel as it looks to stake its claim in the mobile space, the CEO said.

      “Clearly we don’t go into businesses looking to lose money and over time we believe we can make this a profitable business,” Krzanich said.

      Gold wrote in his analyst note that Intel is seeing some design wins, but that it will take another nine to 12 months for the company to turn around the mobile business.

      “They will not be able to compete in any major way with the ARM-based suppliers until they have a fully 4G/LTE SoC late this year and into next year,” he wrote. “Intel’s numbers will likely continue to decline until they achieve volumes with the next generation of SoCs targeting primarily the tablet space first, and then later next year the phone space.”

      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.

      MOST POPULAR ARTICLES

      Latest News

      Zeus Kerravala on Networking: Multicloud, 5G, and...

      James Maguire - December 16, 2022 0
      I spoke with Zeus Kerravala, industry analyst at ZK Research, about the rapid changes in enterprise networking, as tech advances and digital transformation prompt...
      Read more
      Applications

      Datadog President Amit Agarwal on Trends in...

      James Maguire - November 11, 2022 0
      I spoke with Amit Agarwal, President of Datadog, about infrastructure observability, from current trends to key challenges to the future of this rapidly growing...
      Read more
      Cloud

      IGEL CEO Jed Ayres on Edge and...

      James Maguire - June 14, 2022 0
      I spoke with Jed Ayres, CEO of IGEL, about the endpoint sector, and an open source OS for the cloud; we also spoke about...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Applications

      Kyndryl’s Nicolas Sekkaki on Handling AI and...

      James Maguire - November 9, 2022 0
      I spoke with Nicolas Sekkaki, Group Practice Leader for Applications, Data and AI at Kyndryl, about how companies can boost both their AI and...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2022 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×