Intel's growth spurred by datacenter revenues

Without significant growth in datacenter related earnings Intel’s overall performance would have been rather flat, even though total revenue of approximately $14billion with their release of their second quarter revenue numbers,

While the PC Client Group had the largest single revenue number of $8.7 billion, growth was only 3%, while the $2.8 billion in Data Center Group revenue represented a 14% increase. A minimum of 3% growth was reported by other Intel architecture group revenue.  Intel is expecting overall third quarter results to be down,  but given the mid-second quarter release of the latest generation of Xeon processors, I would be unsurprised to see continued growth in the datacenter revenue portion of their overall numbers.

Paul Otellini, President and CEO of Intel, explains the predicted slowdown in Q3. “As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment. With a rich mix of Ultra book and Intel-based tablet and phone introductions in the second half, combined with the long-term investments we’re making in our product and manufacturing areas, we are well positioned for this year and beyond.”

Naturally, it appears Intel is placing a big stake on the Ultra book market, but the area of greatest potential long-term growth and revenue is clearly mobile.  Intel’s access in that market, despite having a broad product line, is nearly nil, with the first phone introduced last April, so any growth there would show as an improvement. Since the product line exists, it will be interesting if a potential Intel investment in Windows Phone 8, which may hit in late Q3, is part of the reason for their lowered financial expectations.


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