Intel’s profit drops as PC sales keep sliding
Where goes the PC market, so goes Intel’s profit… and unfortunately, that means those profits are headed south. Intel is reporting a 6.3 percent year-over-year income drop for the third quarter that can largely be blamed on tanking PC sales. While it did see upticks in its data center and internet of things groups, they weren’t making nearly enough money to offset the loss from Intel’s bread-and-butter chip business. Processor shipments dropped a sharp 19 percent, and the only consolation was a 15 percent hike in selling prices — in short, those who did buy PCs were more likely to be performance mavens (like pros and enthusiasts) than everyday shoppers.
It wasn’t difficult to see this coming. The slow, staggered release of its 6th-generation Core processors (aka Skylake) left many vendors selling PCs that were past their prime — even the release of Windows 10 wasn’t going to persuade some people to buy old gear. And while Intel has been embracing mobile and wearables, it remains a PC-focused company in a world full of smartphones and tablets. The tech pioneer is bound to see better performance in the fall, but it may not be truly safe from profit drops unless it reduces its dependence on conventional computers.