Intel's CEO doesn't think Windows 10 will boost PC sales
Rick Wilking/ReutersIntel CEO Brian KrzanichMore than 95% of Intel's operating income last year came from selling PC chips. It's why Intel keeps a close eye on the overall PC market.
But the PC market in general has been in decline lately. In the first quarter of 2015, global PC shipments dropped 5.2% from the previous year, according to research firm Gartner.
The sharpest decline came from the business desktop PC segment, Intel's core customer base. In fact, Intel had to slash nearly a $1 billion off its revenue forecast in March because of weak demand for business desktop PCs and Windows XP upgrades.
And Intel doesn't expect to see a huge boost in PC sales any time soon, even with the new Windows 10 scheduled for release later this year.
"We are going through another transition, Windows 10 upgrades…We're seeing some quarter-to-quarter pushing, but we continue to take a view of our long-term forecast…the PC market should be flat to slightly down mid single-digits over the long-term," Intel's CEO Brian Krzanich said during Thursday's annual shareholders meeting.
But Krzanich didn't sound too concerned about its impact on Intel's overall growth. Instead, he said growth from other areas, particularly the data center business, will offset any loss in PC sales. Intel's data center business grew 18% last year and it's expected to be a $14 billion business this year.
"We look at it as our next big growth engine for the company," Krzanich added.
We won't be able to find out how exactly the slowing PC market will impact Intel's PC chip sales. Starting from last quarter, Intel is reporting PC and mobile sales under one unified group called Client Computing Group, effectively burying the $4 billion-plus loss it was seeing from its mobile unit.
But by doing so, Intel's also been able to further stress the size of its data center business: the Data Center Group's $1.7 billion operating income last quarter was the largest of any Intel business segment, accounting for roughly 65% of the total.