Intel forecasts quieter Q4 on back of soft consumer demand

Intel has forecast conservative sales for the Christmas quarter on the back of continued concerns of slowing demand in the consumer sector.

Intel has forecast conservative sales for the Christmas quarter on the back of continued concerns of slowing demand in the consumer sector.

The chip giant last night filed a 59% year-on-year hike in Q3 profits to $2.95bn and an 18% jump in sales to $11.1bn, driven by a steady refresh of corporate infrastructure kit which offset a softer retail PC sector in mature markets.

"Despite softness in the consumer market segments of Europe and North America, demand strength in the emerging markets and a robust enterprise market segment led to record microprocessor units," said CEO Paul Ottelini.

He said Windows 7 was fuelling the refresh but the dynamics were different to historic refreshes that were underpinned by new OS and hardware releases.

"[This] is really based on the modulation that CIOs seem to have in terms of just doling out the spending, focusing on the oldest machines first, and then implementing new security methodologies as they bring them on," he said.

Processor sales in the PC Client group climbed 14% to $8bn and the Data Centre division grew revenues 30% to $2.18bn. Total chip sales grew 25% including a 30% rise in high-end server units and 29% in the storage business.

Intel posted growth in all geographies except Europe which was down 0.15% on the same period in 2009 but up 3% sequentially.

Ottelini said the nascent smart TV category launching in the US with introductions from Sony and Logitech, represented a new revenues stream for the company and added that Intel was also preparing to get involved in the tablet PC market over the coming months.

Growth of 3% in sales has been forecast for the final quarter 2010 by Intel which is below the seasonal average of 8%.

"This forecast reflects continued caution about the strength of the consumer market segment and a reduction in customer inventory levels in anticipation of [a new chip code-named] Sandy Bridge," said Intel CFO Stacy Smith.



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