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intelLast week, IDC issued a sobering report which indicated that PC shipments for the first quarter fell by 13.9 percent, despite the release of Microsoft’s new Windows 8 operating system in October.

Now, here’s more sign of trouble in the PC market. Intel announced today that its net income fell by 17 percent during the first quarter in part due to what outgoing CEO Paul Otellini called “market softness.” Net income was down 25 percent compared to the first quarter last year. The chip maker’s revenue also fell, down seven percent from the fourth quarter to $12.6 billion.

Intel’s financial results show weakness across the board

That’s a troubling picture for Intel, and its longtime partner Microsoft. It also presents a real challenge for Otellini’s successor, who has yet to be chosen. The company declined to comment on the succession plan, noting that they plan to have the new CEO named by the time Otellini steps down in May.

“At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market,” said Bob O’Donnell, IDC program vice president, in a news release last week.

The Intel Q1 conference call is starting now, and you can listen in here. In the opening remarks, Intel’s Otellini noted in the call, his last as CEO, that the company will continue to invent and grow in a world “increasingly hungry for the microprocessor revolution.”

“Intel’s story is nowhere near completely written,” he added.

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