Intel has lowered its expectations on Q3 revenues after the disappointing sales performance of notebooks. Intel shares were down 1 percent in the pre-market trading after the release of the report.
The company lowered the bar 7.3 percent from previously expected $13.8 Billion to $14.8 Billion in sales to $12.9 Billion to $13.5 Billion.
“Relative to the prior forecast, the company is seeing customers reducing inventory in the supply chain versus the normal growth in third-quarter inventory; softness in the enterprise PC market segment; and slowing emerging market demand. The data center business is meeting expectations,” the company said in a statement.
Intel has had a lot riding on the new Ivy Bridge Core i-series processors but the underwhelming sales of the new line of notebooks from the likes of Acer, Asus, HP, Dell, et cetera has driving the expectations quite low. Even the PC-makers, who had a lot invested in new laptops, especially ultrabooks, are now seeing a disappointing year on the whole.
Intel also said its capital spending will also be lower than previously expected. “Full-year capital spending is expected to be below the low-end of the company’s previous outlook of $12.1 billion to 12.9 billion,” said Intel.
Ultrabook is a moniker used by Intel to market super-slim laptops within certain constraints. And though they are top-of-the-line gadgets with high portability and simple use, the new wave of tablet computers has gouged most of the PC market share.
The new line of ultrabooks also has an indirect effect on Microsoft, who provides its operating system to these PC-makers. However, its upcoming Windows 8 operating system is expected to turn the tables. Though the OS is mostly tablet-oriented, it has sprung a new trend of hybrid computers (laptop/tablet) that these companies might be able to benefit from.