Intel has posted its latest quarterly results and, if you're a PC maker, it's not good news. Although the company has posted profits in line with what it and Wall Street expected, propped up by strong performances in the company's data centre division, the breakdown shows the company's PC Client division taking a hit.
"The fourth quarter played out largely as expected as we continued to execute through a challenging environment," said Paul Otellini, outgoing Intel president and CEO, detailing the numbers in a statement to the press. "We made tremendous progress across the business in 2012 as we entered the market for smartphones and tablets, worked with our partners to reinvent the PC, and drove continued innovation and growth in the data centre."
Intel, which teamed up with Motorola, Orange, ZTE, and Lenovo to launch its first smartphones in 2012, saw Q4 results for the PC Client Group drop six per cent year-over-year, and three per cent down when you look at the whole of 2012 compared to 2011.
That number is also in line with industry expectations for PC sales. According to IDC, PC shipments in Europe, the Middle East and Africa (EMEA) continued to contract in the fourth quarter of 2012 (4Q12) as sustained weakness in consumer demand and budget constraints in the commercial segment led to a decline of 10.7 per cent in overall PC shipments compared to the same quarter last year.
The fourth quarter results bring total EMEA PC sales to 105.6 million units for the full year 2012, and to a decline by 1.6 per cent compared with 2011. Portable PC shipments remained almost flat, declining by -0.8 per cent in 2012, while desktops declined by -2.9 per cent.
IDC blames the lack of excitement about Windows 8 and the continued push from mobile devices for the shift.
"Windows 8 and new designs did not provide the hoped and awaited boost, and consumers' attention and budgets remained drawn during the Christmas season on tablets and smartphones," All that has a knock-on effect on Intel, which still powers most of the laptops, be they ultrabooks or netbooks, on the market.
The drop in PC sales isn't really a surprise when you look at the wider picture with consumer's appetite for tablets from Apple, Asus, and Samsung continuing to grow.
Asus recently confirmed to Pocket-lint that in the UK it expects tablet sales to beat laptop sales for the first time in 2013, while CES showed us that everyone from Lenovo to Panasonic is looking to the tablet to be the answer for mobile computing in the future.
That's something Intel is clearly aware of as it enters the tablet and phone market and looks to challenge Qualcomm and Nvidia for customers.
The intel results, although positive for the company, could spell trouble for other PC makers who don't have the option of another revenue stream beyond laptops and desktop computers.
"As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing," promises Otellini.
Let's hope that means more tablets, and more phones, with more companies beyond Motorola.