Intel Corp, the world’s largest chipmaker, expects cold winds to blow this fall, as consumers shift their spending toward tablets and a weak global economy curbs corporate spending on computers.
When it reported a 14 percent drop in third-quarter results on Tuesday, Intel said the usual bounce in sales due to the holiday season is likely to be cut in half this year — even though Microsoft is launching a new operating system that it says will get consumers excited about PCs again.
In the quarter that just ended, Intel’s revenue from PC chips fell 8 percent from a year ago, in line with reports from research firms IDC and Gartner that said worldwide PC sales fell more than 8 percent.
The shift away from PCs and toward tablets is a threat to Intel because most tablets don’t use Intel processors. Instead, they use cheaper chips similar to the ones found in smartphones.
Intel wants to get its chips into tablets. The launch of Windows 8, Microsoft’s new operating system, on Oct. 26 gives it a chance to do that, since the software is designed both for PCs and tablets.
However, Intel’s expectations for the Windows 8 launch are muted.
Normally, PC makers ramp up production for the holiday season, but Intel CEO Paul Otellini said he expects that increase to be halved this year, in part because manufacturers are cautious about how consumers will take to Windows 8.
The new software is a radical departure from previous Windows versions in terms of how people are expected to use it to control their PCs.
“I’m very excited about this new operating system,” Otellini said, but “we haven’t had a chance to really judge how consumers will embrace this in the PC space or not.”
Patrick Moorhead with research firm Moor Insight said PC makers have been cautious about building up big stocks of new Windows 8 PCs. That means they put in fewer orders with Intel, though it did see a bit of a spike last month as PC makers built initial stock for this month’s launch.
Intel’s stock fell US$0.77, or 3.5 percent, to US$21.58 in extended trading, after the release of the results. In regular trading, the shares rose 2.9 percent. The stock hit a 52-week low of US$21.40 on Friday.
While the outlook for the fourth quarter was glum, Intel beat expectations for the third quarter, after it had lowered those expectations twice.
The California, company said its third-quarter net income was US$2.97 billion, or US$0.58 per share, down from US$$3.47 billion, or US$0.65 per share, a year ago.
Excluding the amortization of some acquisition-related assets and related tax effects, Intel earned US$0.60 per share, handily beating the average estimate of analysts polled by FactSet, at US$0.50 per share. Revenue fell 5.5 percent to US$13.5 billion. Analysts were expecting US$13.22 billion, in line with the midpoint of Intel’s own forecast.
Intel said it expects about US$13.6 billion in fourth-quarter revenue, below the analyst forecast of US$13.7 billion. More significantly, it said it expects a gross margin of 57 percent, well below the average for the last three years of 64 percent.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last