Time catches up with Intel

Chipmaker turned fashion bag maker Intel, has said it expects no revenue growth in 2014.

On the face of it, the weak forecast is because of a drop in sales of PCs, others claim that Chipzilla is suffering because it failed to see the rise of mobile fast enough. But actually it was probably a combination of factors including a lack of ideas or a desire to wake up and smell the coffee which is contributing to Intel’s pain.

Revenues at Intel’s division which makes chips for desktop computers fell four percent in 2013, from a year ago. However, all the while Intel was telling the world that there had been signs in the past few months that the PC sector was “stabilising”. Any five year old would have told you that unless something changed, that was untrue.

It is possible that Intel was relying on Microsoft killing off Windows XP and a mass upgrade to Windows 7 or 8. Of course, that did not happen either.

According to its latest earnings, the PC chip division generated revenues of $8.6 billion in the October-to-December quarter of 2013, compared with $8.5 billion a year ago.

Intel chief executive Brian Krzanich had a go at rallying the troops but most of his words were about the past. “We had a solid fourth quarter with signs of stabilisation in the PC segment and financial growth from a year ago,” he said. In other words what was done on another person’s watch.

For the full year 2013, the firm reported a net profit of $9.6 billion, down 13 per cent from a year ago.

Krzanich even had to dust off the “we’ve built a strong foundation” speech which is what companies always say when they have not gone anywhere and are unlikely to do so for while.

Most analysts say that Intel’s only hope is to increase the performance of its data centre business. Chipzilla did say that division’s revenues rose eight percent in the last quarter of 2013, from a year earlier. However, the rise was less than some analysts had expected.

This means that while others are saving their bottom lines by making a killing on the cloud, Intel is not.

Intel’s chief financial officer, Stacy Smith, said the division’s revenues in 2014 would probably come in toward the bottom of the previous estimate of 10 percent to 15 percent growth which is pretty rubbish too.

Intel has been trying to push itself into wearable technologies and the internet of thongs, but if that makes any serious money it is going to be a few years yet. In many ways, Intel has locked itself into the mindset that it has to move into more consumer products because it worked for Apple. Its chum Microsoft has made a similar error.

Intel has forgotten what it is and therefore lost what it should be. Its figures seem to bear that out.