Intel cuts outlook on weak PC demand; shares drop

Fri Sep 7, 2012 3:05pm EDT
 

Intel's next-generation PC processor, code-named Haswell, will also be front-and-center at the forum, with executives talking up improved power performance that will let future laptops stay on longer without needing a recharge.

Haswell, due to appear in a crop of laptops released for next year's holiday season, will improve on computing and graphics features and is targeted to reduce electricity consumption from 17 watts to 10 watts, according to Intel.

Intel said it now expects third-quarter revenue of $13.2 billion, plus or minus $300 million, down from its previous forecast of $13.8 billion to $14.8 billion.

Analysts on average expected $14.2 billion. The company is due to report third-quarter results in October.

Intel processors are used in 80 percent of the world's PCs, but the Santa Clara, California, company has been slow to adapt chips for smartphones and tablets and now trails Qualcomm Inc and Samsung Electronics Co Ltd, which design their chips using power-efficient technology licensed from ARM Holdings Plc.

Intel's new Medfield processor, showcased in phones launched this year in Russia, India and the United Kingdom, surprised some critics who believed the chips would consume too much power.

Motorola Mobility, owned by Google Inc, is expected to unveil an Intel-based smartphone in London on September 18, the first of a multi-device agreement with the chipmaker.

"They have a respectable seat at the (mobile) table because they surprised a lot of people with Medfield and just how well that did perform," said Patrick Moorhead of Moor Insights & Strategy. "Their big chance to get more credibility will come with Motorola."

The company said on Friday that full-year capital spending is expected to fall short of its previous forecast of $12.1 billion to $12.9 billion.   Continued...

 
Intel processors are displayed at a store in Seoul June 21, 2012. REUTERS/Choi Dae-woong