Intel Sees PC Market Recovery

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Intel reported its third quarter fiscal 2014 earnings on October 14, showing gains in both its PC and Data Center business units.

Third quarter revenue was reported at $14.6 billion for an eight percent year-over-year gain. Net Income was reported at $3.3 billion for a 12 percent year-over-year gain. Intel’s Data Center Group had a solid quarter with revenue of $3.7 billion, for a 16 percent yer-over-year gain. Intel’s PC Client Group also did well with a 9 percent yearly gain on revenue of $9.2 billion. Looking forward, Intel provided fourth quarter guidance for revenue to come in at $14.7 billion.

Stacy Smith, Intel’s CFO, said during her company’s earnings call that PC volume was up by 30 percent year-over-year when they include tablets, and 15 percent without tablets.

“Of note, our notebook platform units grew over 20 percent year-over-year as we are enabling innovative two-in-one devices and growing our market segment share with Bay Trail at lower price points,” Smith said.

Intel CEO, Brian Krzanich said that for the upcoming holiday season, he has reasonable expectations for PC sales.

“So, we’re expecting not a great holiday season, not a bad holiday season, but a standard holiday season for the consumer in the PC segment,” Krzanich said.

On the enterprise side, Krzanich said at the beginning of the year there was strength in desktop sales and it has moved to notebooks in the second half of the year.

During Intel’s earnings call, analysts asked about the impact of the Windows XP upgrade cycle. Microsoft discontinued support for Windows XP earlier this year, which has become a driver for consumers and enterprises to upgrade hardware to support a newer operating system.

“In our surveys, there is a variety of things that are causing people to go and upgrade their PCs and certainly the Windows refresh is one of them,” Smith said. “But it’s also form factors, it’s the age of the PCs and the price points, I think all of that is playing in.”

Smith added that in the second half of the year, the impact that Intel is seeing with Windows XP is probably less than it was in the front half of the year. That said, Smith said that there is likely a pretty long tail that has some positive impact on the market for a while yet to come.

Data Center

Intel’s Data Center business benefited during the quarter from the launch of the new Xeon E5 Grantley processors, which were officially launched in September.

“This product family provides leadership, features and performance for compute; storage and network workloads,” Krzanich said. “Formally launched just five weeks ago, E5 is already 10 percent of our two-socket volume.”

Sean Michael Kerner is a senior editor at Datamaion and InternetNews.com. Follow him on Twitter @TechJournalist