Intel cuts revenue forecast
Intel Corp has just slashed almost 1 billion dollars from its first ¼ revenue forecast as small business shy away from upgrading their computers, sending the shares of Intel to fall by more than 5%.
According to Intel, very few companies replaced their PC’s which run on Microsoft operating systems that are outdated, and as a result there was a weak demand of its chip. The company also cited “challenges” that are facing the currency as well as macroeconomic, particularly in Europe as reason behind what had happened something that Suji De Silva from Topeka Capital Markets agree with.
"The macro environment is not robust enough for people to upgrade their PCs the way they normally would," he said.
On Thursday, the chip maker stated that it was expecting its first ¼ revenue to be 12.8 billion dollars, minus or plus 300 million dollars, that’s about 7% lower than the figure that it had given out earlier of 13.7 billion dollars, minus or plus 500 million dollars.
Although Intel has segmented its name as the best chip in the market for PC’s it has been slow in adjusting to the growing popularity of Smartphone as compared to some of its rivals such as Qualcomm Inc.
Intel was expecting the demand of their chips from small businesses to grow given that Microsoft had wound down their support of its Windows XP operating system back in April last year something that did not happen and according to Srini Sundararajan this shows that many small business are taking an “if it ain’t broke don’t fix it” attitude to their old personal computers.
Intel has been trying so hard to offset the impact of personal computers which re slow by creating chips for devices which function as a laptop as well as a tablet.