updated 07:53 pm EDT, Tue October 16, 2012
Chip maker misses profit estimates by 4 percentage points
Intel's forecast of its fourth-quarter profit margins fell below Wall Street analysts' estimates today, as the world's largest chip maker continues to feel the effects of a larger slump in the PC market. Intel's estimate showed a gross margin of about 57 percent, shy of the average estimate of 61.4 percent. The company will earn between $13.1 billion and $14.1 billion in revenue for the quarter; analysts had projected about $13.7 billion in revenues.
Intel's profits are hampered by the fact that the general PC market is underperforming. This is due in part to a soft economy, in which consumers are not upgrading on the same schedule they have in previous years. It may also be related to the run-up to the release of Windows 8, which has, by some estimates, caused some consumers to hold off on purchasing a new computer.
Many observers, though, attribute a good portion of the PC market's struggles to the increasing popularity of mobile devices, such as smartphones and tablets. Devices running Apple's iOS and Google's Android operating system are coming to define much of computing, and these devices typically run on ARM-based chipsets. Intel has been attempting to break into this segment, introducing low-powered chips of its own.