Roger Fingas
Intel profits dropped 6.3 percent year-over-year in the third quarter, impacted by a diminished market for desktop and laptop PCs — though the company was buoyed somewhat by things like higher selling prices for chips, and rising sales in the server market.
The company recorded $3.11 billion in net income, down from $3.32 billion, and $14.47 billion in revenue, a decline from $14.55 billion, according to a results statement. Sales of desktop chips fell 15 percent, while notebook processors didn't fare much better at 14 percent.
The blow was softened by higher prices for new Skylake-series processors, and growth in the server and Internet of things (IoT) sectors. Sales of server processors rose 12 percent, while IoT revenue advanced almost 10 percent, albeit to $581 million. Intel also reduced subsidies to PC makers building tablet-like PCs.
Recent Gartner data indicated that the global PC market continued to slide in the third quarter, shrinking 7.7 percent. Only Apple and Dell marked significant growth worldwide, though HP and Lenovo did make gains in the U.S.
Intel's problems may be linked to a variety of factors, including the increasing reliance of many people on smartphones and tablets instead of full-fledged computers. While Intel technically makes dedicated tablet processors, these have largely failed to catch on in a market dominated by the Apple iPad, as well as Android tablets capable of running on processors from companies like Nvidia or Qualcomm.
The company was also likely hurt by people waiting for the launch of Skylake, which began shipping to PC makers during the quarter.
On Tuesday Apple updated its iMac desktops with Skylake chips. The company also released its first 21.5-inch iMac with a 4K Retina display, and upgraded every 27-inch unit to 5K.
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Wesley Hilliard
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Andrew Orr
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27 Comments
Lets see those new chips, and Thunderbolt ports on iTX boards. Then I'll consider a recreational custom build over buying a new mac so soon.
I contributed a small part to their sales when I finally built a new system with a Skylake processor. However, my last PC went for 5 years and I'm not sure I would have bought a new system if it didn't crap out on me.
On a side note, I have to give a HUGE thumbs up to Microsoft support. When my old PC first started acting up, I decided to do a fresh install of Windows 7 on it. It installed fine and activated properly. Then it crapped out. Something with the motherboard and it would only run for a few minutes before overheating (I assume) and freezing.
Tried installing Win 7 on my new PC and it wouldn't activate. Tried the phone method and still no go. This was because my now non-functioning PC had the license activated. Contacted MS customer support with online chat session (this was 8PM PST) and had a rep appear in under 1 minute. Long story short, it took about 45 minutes of remote access tries with me switching back and forth between my old and new PC (and the rep quickly accessing my old PC because he knew it would only work for a few minutes before shutting down) and the rep was able to transfer my license key over to my new machine. Now I have a licensed version of Windows 10 Pro on my new machine and didn't have to pay a dime.
I haven't dealt with MS customer support for many years, but I remember my previous experiences were not quite so pleasant. I bet that this is one of the other areas at MS that Nadella has been involved in.
Ok, and the reason why Apple's stock is down?
Microsoft is not helping Intel by refusing to make the Windows upgrade people want. A Windows 7 interface with the under the hood improvements of Win 8/10 but without the abortion of a UI introduced in Win 8 or the spyware/forced patch installation of Win 10 would sell very well. But MS will never make that product and lots of pent up upgrade dollars flow someplace else.
Intel stock was down almost 3% this morning and now it's rebounded and is actually up about 40 cents. Meanwhile Apple was just downgraded by firm OTR claiming 6S demand is weak due to market saturation and lack of innovation at Apple. :rolleyes: