The global market for personal computers has been stagnant for a while now, and Intel this morning delivered some bad news for Microsoft as the Redmond company looks ahead to the upcoming Windows 8 launch.

Intel reduced its forecast for its third-quarter revenue, saying it expects the number to range from $12.9 billion to $13.5 billion, down from its previous forecast of $13.8 billion to $14.8 billion. And the PC market is to blame.

The chipmaker says in a news release, “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.”

Evercore Partners analyst Patrick Wang tells Bloomberg News, “It’s worse than everyone expected. … Their consumer PC business is getting whacked.”

The PC market is facing strong competition from the growing array of tablets, as more consumers start to view iPads and other devices as viable alternatives to low-end Windows notebooks for mobile computing. Microsoft is trying to address that trend with a new Windows 8 interface designed with tablets in mind. Windows 8 hits the market on Oct. 26.

Comments

  • ObnubilateGat
    • http://www.christopherbudd.com Christopher Budd

      Uh, you might want to give details on that link. Otherwise, it looks like a spam link and I’m not going to click on it.

  • http://www.christopherbudd.com Christopher Budd

    Relative to that, I saw this statistic in another story. I’m not familiar with the source so don’t know how credible it is, but it’s food for further thought. What’s interesting is how they lump all client types together to give an overall picture:

    Microsoft had a 44 percent share of the OS market for PCs, tablets, and smartphones in 2011, according to IHS iSuppli. That could slip to just 33 percent in 2016, the research firm predicted. Intel’s projected market share decline over that same period follows a similar line—from 41 percent of the global microprocessor market to 29 percent, according to IHS iSuppli.

    http://www.pcmag.com/article2/0,2817,2409376,00.asp

    • guest

      Already below 33% on that basis. More than a billion PCs/Tablets/Smartphones will ship this year. MS is effectively a non-player in 2/3 of that and has 90% share in the remainder. While there’s some debate over how much of current PC weakness is temporary vs secular, there is no uncertainty that the overall device market is still growing quite nicely despite a global recession. It’s just that MS (and Intel) have failed to grab any appreciable incremental slice of that expanding pie or create any other businesses with the potential to move the needle overall. As a result overall growth for both is effectively over unless/until they can change that. Intel has brought in new leadership to try and turn things around. MS for some reason still thinks Ballmer can get it done – despite all evidence to the contrary.

  • Paul_Owen

    Intel is putting its chips on mobile+desktop going forward. Mobile, a market w/ much lower margins, that Intel will have to change. Do people want mobile devices with the processing horsepower of a PC? Check back in a few years. See Copeland’s article in Sept Wired.
    http://www.wired.com/business/2012/08/ff_intel/all/

    • http://twitter.com/iC cliveb

      Can’t see Intel pull off the Kobayashi maru sticking to x86 and process improvements. (Microsoft already voted ARM)

  • guest

    Cue MSFT downgrades, renewed calls for Ballmer’s resignation, and Frank Shaw denial that MS is being disrupted and we’re in the post PC era in 3, 2, 1 seconds…

  • Steveb

    I regret to inform that the MS comeback I’ve been promising every year since…well, since we were the undisputed leader and didn’t need a comeback, has been delayed…ah, permanently.

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