Where does Intel go from here?
Let's get one thing straight before the doomsday sayers come out of the woodwork -- the desktop isn't dead. However, desktop sales did decline to the tune of 6.7 percent last year, according to data provided by International Data Corporation, and with Intel so heavily vested in the desktop segment, the company's year-over-year revenue fell flat. Time to hit the panic button? Not quite.
First, a look at the figures. Intel today reported first-quarter revenue of $12.8 billion, operating income of $2.6 billion, net income of $2 billion, and EPS of 41 cents. The company generated around $4.4 billion in cash from operations, paid dividends of $1.1 billion, and spent $750 million repurchasing 21 shares of stock.
By Intel's own admission, revenues were flat "with double-digit revenue growth in the data center, IoT, and memory businesses offsetting lower-than-expected demand for business desktop PCs." Looking at the results, Intel said they "reinforce the importance of continuing to execute our growth strategy."
In other words, reduce its reliance on desktops and focus on growing trends, like mobile and the emerging IoT market. With regards to desktops, Intel may have expected more businesses to upgrade their PCs after Microsoft finally pulled the plug from Windows XP, but depending on where you source your data, XP's share of the desktop market could be as high as 17 percent still.
That might change once Windows 10 ships, which will bring back a focus to the desktop environment rather than force feed the modern UI on users, but in the meantime, Intel sees a need to expand into other areas. While its PC division was down 16 percent sequentially and 8 percent year-over-year, its Data Center Group raked in $3.7 billion, up 19 percent compared to last year, while the IoT segment added another $533 million to the pile, up 11 percent year-over-year.
Along with mobile, these are areas where Intel will look to grow, just don't expect the company to turn its back on desktops. Even though its Client Computing Group saw sequential and annual declines in revenue, it still pulled in more money ($7.4 billion) than the Data Center Group, Internet of Things Group. and Software and Services segment combined. So no, let's not hit the panic button, especially since an uptick in desktop sales could be around the corner.
Follow Paul on Google+, Twitter, and Facebook
From maximumpc
from http://bit.ly/1IJHV0W
