Intel Sees Ray Of Sunshine As PCs Resurrect
You think it’s dead, but it isn’t. You hope it comes back, well.. not yet.
Yes, we talk about the once shining PC, which got dumped in our attics with the advent of smartphones and tablets. However, the tides are slowly seeming to change, according to Intel’s latest earnings report issued this week, which had PCs in the limelight.
The company wrapped up a solid 2014 by announcing its first full year of revenue growth since 2011 and another quarter of better-than-expected profit, driven in part by rebounding PC revenue.
These results sync with a report from research firm Gartner which said that the desktop and laptop market is now experiencing “slow but consistent improvement,” two years after the users rushed to stock smartphones and tablets, and PC sales fell into decline.
What is causing this change? You can credit a number of factors, like Microsoft’s suspension of technical support for its Windows XP last year which forced users to upgrade to latest or newer devices, and the introduction of hybrid laptop-tablet computers, being called “2-in-1” devices.
This change brings the most benefits to Intel, whose chips power most PCs. After the smartphone boom, the California-based company reported lower overall sales in 2012 and 2013. However, as more businesses and consumers started upgrading their computers, Intel made a comeback in 2014, when the company’s revenues rose by 6 percent, to $55.9 billion.
“I’m feeling pretty good about where we are in the PC market,” CEO Brian Krzanich said during a call with analysts Thursday, referring to devices coming out with new technologies and slimmer designs.
Intel’s fourth-quarter revenue was also up 6 percent, to $14.7 billion, and net income rose by 39 percent, to $3.7 billion, from a year earlier. Its earnings of 74 cents per share handily topped Wall Street’s expectations by 8 cents a share.
This means the constant favorite chip maker is still not out of business and seeking opportunities with the rise and fall of trends. Its shares were down about 1 percent in after-hours trading because it forecast slightly lighter-than-expected revenues in 2015, suggesting uncertainty over whether consumers will keep buying new PCs.
But it also means that the latest trend of PCs has opened the pot of gold for other companies as well. This includes Apple, which is already boasting of its record breaking Mac sales, and Lenovo experiencing double-digit shipment growth, according to Gartner and IDC.
However, Intel, whose future is tied to the PC more than any other firm, hopes the trend remains escalating upwards with the release of its long-awaited fifth gen Core i-series processors and its RealSense 3D camera technology being integrated into more computers. Microsoft’s release of Windows 10 later this year could also help boost sales.