Intel reduces its revenue target by $1 bn

Intel has slashed its revenue outlook to $12.8 bn from the earlier estimate of $13.7 bn due to low demand for business desktop PCs.

This is due to the weaker demand for business desktop PCs and lower-than-expected inventory level across the PC supply. PC shipmemts are expected to dip 4.9% in 2015 to 293.1 mn PCs. The PC market reached $201 bn in 2014, a decline of 0.8%, and is expected to fall another 6.9% in 2015, with smaller declines in the subsequent years bringing the total to $175 bn by 2019.

 The company expects the mid-point of the gross margin range to remain at 60%, plus or minus a couple of percentage points, as lower PC unit volume is offset by higher platform average selling prices.

 Intel is of the view that the changes to demand and inventory patterns are due to lower-than- expected Windows XP refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe.