Intel reported its quarterly earnings yesterday evening. The previous single digit percentage increase in revenue forecast for 2013 has been revised to "flat". It's second quarter net earnings amounted to $2 billion, in line with expectations but in the same quarter last year it made $2.8 billion. Intel will be cutting capital spending during the year to about $11 billion, this follows a proposed reduction from $13 billion to $12 billion set in April.
It is thought that the fifth quarterly global decline in PC shipments is weighing heavily on the company. Offering a positive way forward, new Intel chief Brian Krzanich said that the company would aggressively push forward with the rollout of its new Atom mobile chips.
While the decline in PC sales has been a predictable trend for quite a time Intel has been hit with softer sales in China than was anticipated in the most recent quarter. China's growth has been impacted by a slow down in recent months.
To try and turn around, again Intel are promising to make inroads into smartphone and tablet processors. This quarter they are yet nearer to a product launch that can make inroads into those markets; the new Silvermont based Atom chips. With a focus on getting these new Atom chips out and then improving the product line still further Krzanich promised "We will move Atom even faster to our leading-edge silicon technology". The new CEO has been "spending a lot of time with manufacturing customers" and this is expected to precipitate results, Reuters were told. A recent big design win for Intel was the inclusion in one of Samsung's upcoming top-tier Android tablets.
Intel based tablets at $150 and below, laptops at $300 and below
Speaking at the quarterly earnings call Krzanich put some flesh on the bones of Intel's tablet plans. In particular he said that upcoming Bay Trail Atom tablets will be priced at "$199 and below", he added "some you'll see even lower -- $150, and below that, as we go through the holiday season". Krzanich also promised a new series of Haswell processors that will appear "in some cases" in laptops under the $300 mark. These designs will include traditional clamshells, convertibles and 2-in-1s.
An analyst asked whether shifting resources to Atom processor production will cannibalise sales of Intel's higher margin Core processors. "At the end of the day, the market will go where the market goes, and [its] better to have a product like Bay Trail ... than miss that market, which if you look over the past was more the case," replied Krzanich. However looking forward to the 14nm process PC World reports that Broadwell chips will be the first such Intel parts to roll out during 2014.
