Mobility drives profit hikes at Intel

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Mobility drives profit hikes at Intel

By CAROLINE GABRIEL

Published: 17 October, 2008

READ MORE: Intel

The mobile sector buoyed Intel's third quarter results as sales of its Atom product for ultra-mobile PCs and mobile internet devices started to have full impact. The silicon giant announced a 12% year-on-year increase in net profit to $2bn, but the company acknowledged uncertainty for the current quarter in light of the current financial crisis, and gave a broader than usual range for Q4 revenue guidance, from $10.1bn to $10.9bn.

This guidance disappointed analysts, who had expected a Q4 revenue range of $10.4bn to $11.18bn. CEO Paul Otellini said the financial crisis is creating some signs of stress on Intel's business, but that the impact is difficult to quantity, and promised a mid-quarter update.

Intel gave much of the credit for the third quarter numbers to strength in the company's Mobility product group. Net revenue from this group came in at nearly $4.7bn, up from about $4bn a year earlier. Atom and other chips for the netbook segment recorded Q3 revenue of $200m, though fears remain that Atom will cannibalize the market for higher margin products. Intel said its average microprocessor ASPs declined sequentially, but would have been flat excluding Atom products. CFO Stacy Smith noted that the Atom product has a good profit margin, higher than the Celeron product.

"To date we have not seen any evidence of cannibalization, and believe me we are watching," Otellini said. "The strength of the core mobile business independent of Atom is still very strong." The aim is to extend PCs to a wider audience.