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Intel Q1 Revenue Down; Atom Sales Fall

By - Source: Tom's Hardware US | B 11 comments

Intel report slumping Q1 numbers. Yep, we’re still in a recession.

It’s grim times in the economy, but Intel still managed to beat expectations with news that things aren't as bad as initially anticipated. The company reported earnings and revenue down 55 percent and 26 percent, respectively. Gross margin also fell from 53 percent to 46 percent.

The slump in the numbers should come as no surprise given the sagging economy, which has hit the computer industry as a whole since late 2008. According to Mercury Research, shipments of x86 CPUs for desktops, servers and notebooks declined 18 percent between the third of fourth quarter of 2008. Overall, the x86 market was down 8.8 percent as compared to fourth quarter 2007.

The Intel Atom processor has always been a bright spot for the company, thanks to the growing netbook and nettop market, which appeal to the price-sensitive buyer. Sales of the Atom accounted for $219 million for the quarter, which represents a 27 percent decline from the prior quarter.

Intel is optimistic for brighter days ahead, as company CEO Paul Otellini said during a conference call, "We are seeing signs that the bottom of the PC market segment has been reached. I believe the worst is now behind us."

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  • 3 Hide
    Anonymous , April 15, 2009 7:14 PM
    I'm sure Intel has multi-millions somewhere stocked. We won't be seeing that company going down,even if the recession takes another year or two.
  • 0 Hide
    solymnar , April 15, 2009 7:30 PM
    You're probably right ProDig.

    Intel hasn't been known to mismanage funds and has been running in the black for a loooong time now. They also don't hesitate to down size when its beneficial seeming to prefer shrinking instead of risking having too much red ink at the bottom line.

    In the position they are now...they can afford to be careful.
  • 1 Hide
    hellwig , April 15, 2009 7:41 PM
    Don't forget the millions Intel is spending trying to bully AMD and NVIDIA into paying more for licensing rights. That's going to bite them in the end too (especially when AMD and NVIDIA don't back-down and just pay Intel what it wants).
  • 1 Hide
    avericia , April 15, 2009 7:41 PM
    "We are seeing signs that the bottom of the PC market segment has been reached."

    I have to agree, I built a box last November and i saw a lot of parts actually go up slightly a few months after and other parts now are only 10-15% bellow what i paid for them which is less depreciation then you normally see in a 7 month period on PC parts.
  • 0 Hide
    danimal_the_animal , April 15, 2009 7:55 PM
    atom sales are weak because people want the DUAL CORE version in their netbook instead of this CRAP single core.....and are probably holding out in hopes of an ion based netbook.

    i bought my daughter an acer aspire IS a cool laptop, but why not add a dual core instead of a single?

    and why not an ion chipset and a 720p screen?

    1024x600 is really lame.
  • 0 Hide
    danimal_the_animal , April 15, 2009 7:56 PM
    also it would be COOL to have HDMI output on a netbook.

    they would be killer if this happened.
  • 0 Hide
    apache_lives , April 15, 2009 10:07 PM
    everyone who wanted one bought one? so lower sales now?
  • 2 Hide
    yoda8232 , April 16, 2009 12:22 AM
    Lower your prices and you'll do better, much better.
    Easy as that.
  • 0 Hide
    Anonymous , April 16, 2009 12:25 AM
    Misinformation abound in these comments. Atom sales are down from Q4 because many OEM built large inventories in Q4 due to the popularity of netbooks. Intel is forecasting a roughly 2X increase in sales for 2009 compared to 2008...I guess that's 'slowing' for the haters?

    AMD does not pay Intel a SINGLE PENNY for licensing! They are not trying to bully more fees out of them, because they don't pay any! They have a royalty free cross-license. What they are trying to do is ensure the spinoff, ummm 'subsidiary', of Global foundries meets the contractual agreement and that the license isn't transferred to them (as AMD can't do that without INTEL's OK).

    Intel has ~10Bil in cash on hand, even with handing out just under 1Bil/year in dividends.
  • -1 Hide
    outacontrolpimp , April 16, 2009 12:11 PM
    justthefaxxMisinformation abound in these comments.

    Thank you, I knew this same information as you. AMD made a new company to make processors, which wasnt ok. AMD CAN make them tho, just not that Global watever its called company.
  • 0 Hide
    ta152h , April 16, 2009 3:14 PM
    I'm pretty surprised that the media jumps on this information about the Atom likes it's really news. A revenue drop from fourth quarter to first quarter? Wow, that's really news! That really never happens. It's a sequential drop, it's what happens from fourth quarter to first quarter.

    On top of this, there was some anticipation of the new units coming out.

    I'd have no worries at all about the Atom, but I guess people have to write stories so they make a big deal out of something that's really not. If it were a year to year drop it would be a little more meaningful.

    Oh, and AMD does pay royalties to Intel. AMD mentioned this is passing a few months, in a story about NVIDIA trying to make an x86 processor.

    Here's an old link, but it applies to the 1995 agreement.

    Under the terms of the settlement, both companies gained free access to each other's patents in a cross-licensing agreement. AMD agreed to pay Intel royalties for making chips based on the x86 architecture, said Mulloy, who worked for AMD when the settlement was drafted. Royalties, he added, only go one way. AMD does get to collect royalties from Intel for any patents Intel might adopt.