Intel profits slide

Not as bad as expected though

Source - Reuters

Problems in the communications industry and a CPU price war with rivals AMD have taken their toll at Intel, with the world's leading chip manufacturer reporting revenues of "just" $6.3bn for the three months ended June 30th, a 24% drop compared to the same period last year. Meanwhile profits slumped 76% to $854m, although this was actually slightly better than most Wall Street estimates.

The company blamed poor sales of flash memory chips and communications and networking gear for the drop in revenues, with processor sales actually rising slightly compared to the previous three months. This "gives us confidence that the stronger seasonal second half that we typically experience will happen" according to CFO Andy Bryant. All of which won't help Intel much in practice though, as Bryant also revealed that the average selling price of their CPU range will continue to drop as they try to stall AMD's recent advance. The rival manufacturer now holds as much as 22% of the market according to one recent survey, although Intel were quick to poor scorn on the figures. "[The survey] was wrong - they didn't have our data", executive vice president Paul Otellini told Reuters. "I suspect they'll revise it soon."

Either way, the sweeping price cuts on processors as they joggle for position is obviously starting to hurt both companies. All of which is good news for those of us wanting to buy a new computer in the next year - Otellini expects Pentium 4 based computers to be selling for under $800 by the end of the year (although this may include lacklustre SDRAM-based systems) and the top of the line 1.4GHz Athlon is already available in the UK for around £150. Time to treat yourself to that long overdue upgrade?

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