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Intel pins hopes on Haswell chips as profits drop

Intel is pinning hopes of a turnaround on its new Haswell chips.

By Shona Ghosh and Reuters

Posted on 17 Apr 2013 at 11:08

Intel is continuing to feel the pinch of sliding PC sales, cutting its revenue forecast for the current quarter and recording a 25% fall in profits for the last.

However, the firm is pinning its turnaround hopes on the release of its Haswell chips this quarter. Intel said the new chips could boost PC sales and bring profits back to growth after the second quarter.

"We believe the combination of an improving macroeconomic environment, Haswell coming to the market; ultramobile form factors like Ultrabooks, convertibles, and tablets; and touch-enabled devices leads to a return to growth in the second half of the year," said CFO Stacy Smith.

The consumer switch to tablets and smartphones has resulted in the third straight decline in quarterly profits for Intel. According to IDC, PC sales fell 14% in the first three months of the year, piling pressure on Intel to boost its share in tablets and smartphones.

This, plus Intel’s increased manufacturing costs, meant profits sagged to $2.05 billion from $2.74 billion a year ago, while revenue fell to $12.58 billion from $12.91 billion.

The firm anticipated a drop in revenue for its next quarter of as much as 8% to $12.9 billion, give or take $500 million, in line with expectations. But Intel has kept to its full-year revenue forecast for 2013, forecasting success for Haswell, its upcoming Bay Trail chips for tablets and its server chip business, which boosted sales this quarter.

"These numbers are not very solid, but the second-quarter guidance is better than feared. Conditions are probably not as bad as industry reports have suggested recently," said Doug Freedman, an analyst at RBC Capital.

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User comments

Seems plausible...

Part of Intel's problem seems to have been a failure to appreciate just how badly its lack of a high-performance, low(ish) power chip would affect both Ultrabooks and Tablets.
The execrable "Atom" and its scions simply don't cut it and Sandy Bridge is too power-hungry (aren't we all?).

Haswell potentially perks-up many parts of the Wintel ecosystem, from Win8 Tablets, to Ultraportables.
Of course its going to have to pile 'em high and sell 'em cheap, something Intel isn't really accustomed to doing.
If it gets it right it will boost both the CPU\Chipset business AND intel's SSD memory business too.

By wittgenfrog on 17 Apr 2013

Secret Sauce

As long as Haswell goes straight to desktop in win 8 it will revitalise the PC market.

By milliganp on 17 Apr 2013

Optimists

As long as six year old PCs can run office and Chrome, PC sales will be low. That leaves tablets where they will have to cut their margins hugely to compete with ARM licensees.

The only ray of sunshine is servers.

By tirons1 on 17 Apr 2013

What will you be able to do with the new CPUs that you can't do with the old ones?

It used to be a case of "upgrade to play the latest games". But I think the last time someone genuinely felt like that was about 10 years ago, before graphics apathy among PC gamers set in, and the best multiplayer experiences were seen to be on consoles/free2play browser games. Upgrading an entire PC to play probably one new game just doesn't begin to sound sensible in a recession even if graphics WERE still improving.

By leeds_manc on 17 Apr 2013

@leeds_manc

Agreed.

I've got a Core i7 920 overclocked to 3.2Ghz and that is absolutely fine for all my picture editing, video editing and gaming. I have dropped in a SSD recently and added some more RAM but I have no intention of upgrading the CPU/Mobo until processor dies are manufactured in single figure nanometers. I reckon that puts my next upgrade in either late 2018 or early 2019... or until some scally nicks it.

By mrajs on 17 Apr 2013

Dead End on way

The next (after Haswell) Intel CPU will be soldered to the motherboard apparently.

By dholbon on 18 Apr 2013

@leeds_manc

We have gotten to the point, where extra performance isn't necessary, to the end user, what is important is efficiency.

With spiraling electricity prices, doing the same amount of work on less power is much more important than top speed.

I don't care, if my car does 220mph, if I am stuck doing 70mph on the motorway, I want one that will do over 50mpg at 70, instead of under 30mpg...

By big_D on 18 Apr 2013

Its about efficiency...

I don't know what Intel are hoping. But as per my original post, I see Haswell chip(sets) rejuvenating the Wintel Ultrabook & Tablet marketplaces.

I don't think anybody sees much growth in desktop PC type devices.
I assume Business will recommence replacement cycles sooner or later.

The "PC" isn't dead, or even dying; it's simply matured. Once that happens, people don't constantly upgrade. Think Fridges, or Washing Machines....

By wittgenfrog on 18 Apr 2013

@wittgenfrog

We are going to replace our P4s this year, but sadly for Intel, £30 Celerons will do nicely.

By tirons1 on 19 Apr 2013

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