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Intel looks to IoT and data centres for revenue growth


via Flickr © 401(K) 2013 (CC BY-SA 2.0)

Intel reported full-year financials yesterday. The company posted record group annual revenues up 6 per cent to $55.9bn and net income of $11.7bn. Intel said both the PC business and the Data Center business “outperformed our expectations at the start of the year”.

“The fourth quarter was a strong finish to a record year,” said Brian Krzanich, CEO of Intel. “We met or exceeded several important goals: reinvigorated the PC business, grew the data centre business, established a footprint in tablets, and drove growth and innovation in new areas. There is more to do in 2015. We’ll improve our profitability in mobile, and keep Intel focused on the next wave of computing.”

Revenue from its traditional PC business rose $1.4bn on the previous year to reach $34.7bn, despite a 3 per cent dip in the fourth quarter raising questions about a general recovery of the PC market. Operating income from its PC business accounted for more than 95 per cent of the company’s total profit.

However, for 2014, Intel reported that its the mobile and communications group generated $202m in sales, down 85 per cent from last year’s $1.4bn. Operating losses came in at $4.2bn, around $1.1bn worse than 2013. The numbers were pretty much as expected, as Intel had earlier warned that its late focus on mobile would adversely affect the year’s performance.

The Data Center Group reported full-year revenues of $14.4bn, up 18 per cent on the previous year, whilst the Internet of Things Group posted revenues of $2.1bn, up 19 per cent. Finally, the Software and Services operating segments saw revenue of $2.2bn, up 1 per cent from 2013.

Revenue for this year is expected to grow in the “mid-single digits” percentage points. But with pretty dull PC market (“We're predicting kind of flat, nothing spectacular but stable, is how I would call it,” said Intel CFO Stacy Smith)

Despite the tepid PC market, Intel is targeting revenue growth this year in the "mid-single digit percentage points", which Intel’s CFO said would be gained by faster growth in chips for data centres (where it has a market share of around 90 per cent) and IoT devices – it is developing a product codenamed Curie for the IoT sector. Earlier this month Intel unveiled its fifth-generation core processor, codenamed Broadwell-U, which is optimised for the new generation of extremely slim laptops.

Krzanich said the company shipped more than 46 million tablet chips in 2014, beating its goal of 40 million. “If it is smart and connected, it’s best with Intel,” he told analysts.

For the first quarter of this coming financial year, revenue is expected to be $13.7bn, in line, it says, with the average seasonal decrease.

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