PC sellers are hurting, and so is Intel.
Citing weaker demand from its customers, the chip manufacturer is lowering its third-quarter sales outlook to $13.2 billion from its previous range of $13.8 – $14.8 billion. The company also dropped its gross margins estimates from 63 percent to 62 percent.
That’s all bad news for Intel and the PC market. The third quarter is usually when chip buyers up their orders in preparation for the holiday season. If customers are reducing inventory, that likely means they aren’t selling off the chips they already have.
This not only means weak PC sales but also that Intel’s own bottom line is going to take a hit. (And we’re likely to see this more strongly during the fourth quarter this year.)
A lot of the blame for the PC sales downturn can be pinned on the iPad, which has ushered in a new, dangerous time for companies heavily invested in the PC market. This is complicated further by the upcoming launch of Windows 8, which is adding more uncertainty to the market.
Intel’s shares are down 2.81 percent to $24.39 on the news, showing that investors, too, are prepping for the company’s declining sales.
Intel Image: Flickr/ keitamiyoshi