Intel raises revenue expectations as demand for business PCs increases

Intel Corp. on Thursday announced that as a result of higher demand for business personal computers its sales for the second quarters will be significantly higher than expected. The world's largest chipmaker also increased its revenue and gross margin forecasts for the whole year. It is believed that businesses and enterprises started to replace systems with new PCs because Microsoft Corp. no longer supports its Windows XP operating system.

Intel now expects second-quarter revenue to be $13.7 billion, plus or minus $300 million, as compared to the previous range of $13.0 billion, plus or minus $500 million, the company said. The chipmaker is forecasting the mid-point of the gross margin range to increase by 1 point to 64 per cent, plus or minus a couple of percentage points. Intel also projects some revenue growth for the year as compared to the previous outlook of approximately flat. Intel is scheduled to report its second-quarter financial results on July 15, where it will discuss the reasons behind its revenue increase in details.

A number of market observers said that since Microsoft no longer supports the Windows XP operating system, many business and enterprise customers started to buy new machines featuring modern OSes and hardware. As a result, the demand for PCs began to increase in April. It is believed that the demand for business PCs will continue to be strong for the rest of the year.

Business PCs are powered by the Intel Core i-series processors featuring the vPro technology, which are based on the latest micro-architectures, such as the Ivy Bridge and the Haswell. If consumers also started to replace their PCs because of the Windows XP support (the lack of it), then shipments of Intel’s chips like Atom, Celeron and Pentium will also get a boost.

While Intel and PC makers will enjoy a boost in sales thanks to the end of the Windows XP support, it should be noted that such situation only happens once in several years.

“PCs have been getting less bad for a while,” said Stacy Rasgon, Bernstein analyst, in an interview with Reuters news-agency. “But if it's all business PCs then the question is going to be sustainability.”

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KitGuru Says: While it is obvious that along with Intel a number of big PC suppliers will also benefit from increased demand for business PCs, it remains to be seen how the industry as a whole will (and whether) benefit from this situation…

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