Intel's Cuts Median Q3 Earnings Outlook by $1.1B USD
September 7, 2012 12:53 PM
comment(s) - last by
Ultrabooks may not be selling as well as expected; 7.7 percent drop in outlook warns of trouble ahead
Intel Corp. (
) on Friday announced a trimming back its Q3 2012 earnings predicition from
an already gloomy
$14.3B +/- 0.5B USD to $13.2B +/- 0.3B USD. The 7.7 percent dip was blamed on a variety of factors.
[Intel] is seeing customers reducing inventory in the supply chain versus the normal growth in third-quarter inventory; softness in the enterprise PC market segment; and slowing emerging market demand. The data center business is meeting expectations.
So what does that mean?
The inventory reductions could be attributable to several factors. First, Windows 8's
for laptops may be leading to supply chain frustrations due to tight supply for the fast-growing display technology. Second, some OEMs have
regarding the risk that Microsoft Corp.'s (
could be poorly received by customers. Changes like the
unwrapping of the Start Menu
into the new "
Windows 8 Theme
" side screen have
outraged some Windows traditionalists
Third, OEMs are moving towards the competition -- ARM Holdings, Plc.'s (
titular architecture. OEMs appear to be responding to ARM's conquest of the tablet and smartphone space by
racing their Windows RT
(ARM Windows 8)
products to market
. Lastly, OEMs may be reacting to weaker than expected Ultrabook demand, slowing purchase orders.
David Schmook, head of North American operations at Lenovo, said in
a previous interview
, "[Intel meeting its 2012 ultrabook targets is] going to require a very strong first couple of weeks of launch of Win 8. They’ll be a lot bigger than they are now. I don’t know if it will get all the way up to 40 percent."
The mobile sector's biggest winner, ARM is now looking to horn in to Intel's PC hegemony via its power-efficient system-on-a-chips. [Image Source: Digital Trends]
The good news for Intel is that ARM chipmakers who rely on third party fabs like Samsung Electronics Comp., Ltd. (
) and Taiwan Semiconductor Manufacturing Comp., Ltd. (
) (TSMC) have
barely squeaked onto the 28 nm node
. Meanwhile, Intel is already mass-producing at 22 nm and will move to
14 nm node in 2014
. Samsung has plans for 14 nm, but it appears Intel is at least a bit ahead at the moment.
Intel did offer another scrap of good news -- it thinks it can repurpose existing machinery/resources at its fabs for the 14 nm die shrink, which it says will allow it to cut capital spending from $12.9B USD to $12.1B USD. That should help it post a bit better net earnings numbers come Q3's official figures.
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RE: Beginning of the end in my opinion
9/7/2012 1:07:08 PM
Or god forbid... They could just actually compete with Arm on all fronts, Medfield was a good stepping stone, but they do need to push harder especially with the goodness that is Binary Translation to run both Arm and x86 code.
RE: Beginning of the end in my opinion
9/8/2012 4:51:19 PM
ARM has competitive forces helping it out that X86 lacks right now. I'm glad to see MS supporting ARM just so we will have more choice down the road in low power laptops. Its never good for consumers when one company completely dominates.
"There is a single light of science, and to brighten it anywhere is to brighten it everywhere." -- Isaac Asimov
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