Intel slashes 4Q outlook on dimming PC demand

[Pale Blue Dot]

Source: Associated Press

SAN FRANCISCO (AP) — Intel Corp. whacked more than $1 billion from its fourth-quarter revenue forecast and ratcheted down its profit expectations because a clampdown on spending is reducing demand for its chips.

Intel's announcement Wednesday illuminates how the economic crisis is rippling across industries. As consumers and businesses cut back on buying all kinds of things, their reduced purchases of PCs are harming computer makers and their suppliers. Intel is the world's largest supplier of microprocessors, the brains of personal computers, with roughly 80 percent of the global market.

Intel now expects sales of $9 billion in the last three months of the year, plus or minus $300 million. It previously expected sales between $10.1 billion and $10.9 billion, and analysts polled by Thomson Reuters were looking for $10.3 billion.

Intel blamed "significantly weaker than expected demand in all geographies and market segments" and PC makers buying fewer new chips as they burn through existing inventory to save money.

Intel's profit is being hurt badly. The company's closely watched gross profit margin will now come in around 55 percent of revenue, plus or minus a couple of percentage points. The previous guidance was for roughly 59 percent.

Read more: http://ap.google.com/article/ALeqM5iY1_slgz-LC8Ul1Db7yysO7UK5rAD94DM9601

---

The markets will NOT be happy tomorrow. This is very bad news. :scared:

[Tandalayo_Scheisskopf]

1. I just specced out two PC's.

One was Intel QuadCore-based, One was AMD QuadCore-based. Otherwise, they were pretty much identical. The AMD-based system was considerably cheaper, and the reviews say that AMD's performance is very, very good, as does my experience.

Intel is going to have to revisit its pricing, if it wants to maintain its market share. AMD is poised to eat Intel's lunch. Again.

[aquart]

2. I think they reacted today. Tech stocks were way down.

[FarCenter]

3. On the corporate side

Server virtualization is really taking hold.

The number of employees is dropping -- hence no need for new workstations and mail/file servers.

Anyone who was on a 3 or 4 year equipment refresh cycle can easily stretch everything for another year.