Intel forecasts lower revenues for Q3 due to a reduction in demand


Intel forecasts lower revenues for Q3 due to a reduction in demand

Caroline Baldwin

Intel has announced a decline in its sales forecasts for the third quarter (Q3) of 2012, due to lower demand for consumer and enterprise PCs.

The world’s largest chip manufacturer expects revenue from Q3 to sit between $12.9bn and $13.5bn, down from original forecasts of $13.8bn to $14.8bn.

In July, Intel warned of a slowdown as it announced its Q2 financial results. During the last quarter, which ended 30 June, Intel made sales worth $13.5bn and a profit of $2.8bn. In the same quarter a year ago, Intel made sales worth $13bn and a $2.95bn profit. 

Intel said individuals have not been buying and upgrading computers, which has had an immediate knock-on effect to Intel’s revenues. A number of factors, including the recession; Windows 8; and tablet computers may have affected purchasing.

Businesses may also be holding back on buying PC hardware as they want to upgrade to Microsoft’s new operating system (OS), Windows 8, which does not launch until October.

Some 68% of IT managers are planning to roll Windows 8 out over the next two years which could prolong the slump in Intel revenues.

An increase in purchases in the tablet market has also caused a reduction in demand of standard PCs, as tablet computers use a NAND or flash memory chip, rather than the RA chips produced by Intel. The company has recently invested in the tablet industry by securing a $375m deal with Interdigital to acquire patents relating to networking and mobile technologies, which should ensure Intel has a good footing in the tablet sector in the future.

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