Intel cuts revenue forecast of 1 Billion as desktop demand weakens

 

 

Reuters reports that Intel Corp slashed nearly $1 billion from its first-quarter revenue forecast as small businesses are putting off upgrading their PCs. This sent the stock price down by more than 5 percent

The demand was lower as fewer companies are replacing their desktop PC running outdated Microsoft Windows XP. As programs can still run, there is no urgency to upgrade.

Intel said on Thursday that it expected first-quarter revenue of $12.8 billion, plus or minus $300 million – about 7 percent lower than its earlier forecast of $13.7 billion, plus or minus $500 million.

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Though dominant in the market for chips used in PCs, Intel has been slower than rivals such as Qualcomm Inc to adjust in recent years to the growing popularity of smartphones.

When Microsoft Corp wound down support for its Windows XP operating system last April, Intel had expected a bounce in demand from small- and medium-sized businesses. But this has not happened. Will this delay the launch of Broadwell processors (June 2015) and the upcoming Skylake platform which is scheduled for a Oct 2015 launch. Will the prices of existing processors take a cut to entice customers ?

AMD on the other hand has been suffering from it’s demand as the low price “Factor” didn’t really make people jump for it. Furthermore AMD market is more on DIY Gamers while Intel’s is more widespread.

INTC closed yesterday at $30.80 down -1.53 (-4.73%) while AMD at $2.76 down -0.08 (-2.82%).

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