The PC market declined by almost 10% in 2013, this year we are looking at a much better year with the PC market expected to drop just under 3%. (Read our earlier article how tablets will overtake PCs).
Intel says the worst times are over for the PC industry and looking at their latest financials they announced on Tuesday it certainly seems that way. Here are the financials highlights:
- Revenue: $13.8 billion (YOY increase of 8%)
- Operating profit: $3.8 billion
- Gross Margin: 64.5% (up from 59.6% last quarter)
- Q3 forecast: $13.9 – $14.9 billion
While Intel is operating in many different market segments, the main PC processor unit is still by far the biggest within the cooperation. Due to less decline in the overall PC market but especially high demand in the corporate upgrade market caused by Microsoft ending support for Windows XP, the CPU business unit increased the revenue to $8.7 billion (+9% from last quarter, 6% YOY).
Server processor revenue increased 19% from the same period last year to $3.5 billion.
So the numbers overall look very impressive, Intel however also had to report some less positive news for the mobile and communication business unit which is focused on the tablet and smartphone market. The revenue from last quarter decreased 67% to $51 million. While management said the company is projected to ship 40 million tablet processors this year, they are heavily discounted which impacts revenue heavily.
Intel has to make the mobile and communications group account for more of their overall business. While the PC market has seemingly stabilized a bit, it is still uncertain how that will play out in the future. The smartphone and tablet market is guaranteed to grow and luckily for Intel they generate enough revenue and profit in other segments which allows them to aggressively position themselves in this growing market without effecting the bottom line of the company too much.