Intel is set to announce its second-quarter 2015 earnings on July 15th. The chip maker ended 2014 with strong guidance, but 2015 has not been that impressive for the firm to date, owing to weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain.
PC market appear weak
In 2015 so far, Intel’s business has suffered from decreasing PC shipments, challenging macro-economic conditions and the appreciating U.S. dollar. PC sales have been lackluster through the second quarter of 2015, dropping 11.8% year over year according to a research firm IDC, and that is why the Trefis Team is not expecting any substantial growth for Intel in the quarter.
After gaining ground in the second half of 2014, the PC market is looking weaker this year, primarily due to lower than expected Windows XP refreshment activity among small and medium business along with volatile macro-economic and currency conditions, especially in Europe. Research firm IDC stated that while some parts of the markets saw a significant rise in demand during the second half of 2014, part of the fourth-quarter volume was exaggerated by an inventory build-up of ‘Windows 8.1 + Bing’ systems in “anticipation of Microsoft scaling back subsidies in early 2015.”
Intel to continue its push in other segments
In business units such as the Internet of Things, data centers and the NAND businesses, double-digit growth was seen in the first-quarter of 2015, and the growth momentum is expected to continue in the second-quarter as well.
Intel says that a lot has changed over the last year, with the company entering into a broader range of devices and emerging segments. Moreover, the firm is determined to focus on ongoing trends in 2015 as well. Going forward, the key focus areas for the chip maker are innovations in the client business, earning a higher profit, investing and expanding into profitable adjacent markets.
Intel is expected to start shipping its Skylake platform in the second half of 2015. The upcoming chip is based on an entirely new 14 nm core with various architectural improvements. Furthermore, according to the chip maker, the percentage mix of the 14 nm processors is more than it expected. That means new designs and platforms can push the demand of PC in the long run.