Intel revenue up 3%, profit down 51%, IoT adds $572 mn

Intel CEO Brian Krzanich on job
Computing major Intel has posted 3 percent increase in revenue in the second quarter of 2016 to $13.5 billion.

Profit of Intel fell 51 percent to $1.3 billion in Q2 2016.

 

Intel generated quarterly revenue of $572 million from IoT business.

Intel’s PC OEM partner Dell has stated it has well over 100 IoT proofs of concepts in the works, many of which incorporate a Dell Gateway device, based on Intel chips.

“The speed with which Intel’s IoT business accelerates will be determined by the value it brings to developers and developers’ ability to deliver value to their end customers, as well as the length of the cycle from idea to proposal to commitment to execution to deployment,” said Krista Macomber, senior analyst at TBR.

 

Intel revenue in Q2

$7.3 billion (–3%) from Client Computing

$4 billion (+5%) from Data Center

$572 million (+2%) from Internet of Things

$554 million (–20%) from Non-Volatile Memory Solutions

$537 million (+10%) from Intel Security

$465 million (+30% sequentially) from Programmable Solutions

Intel CEO Brian Krzanich said: “Our restructuring to accelerate Intel’s transformation is solidly on-track. While we remain cautious on the PC market, we’re forecasting growth in 2016 built on strength in data center, the Internet of Things and programmable solutions.”

Krista Macomber, senior analyst at TBR, says Intel diversifies into high-growth markets, but volatility threatens near-term profits. Intel is diversifying its top line, reducing its reliance on a weakened global PC industry for revenues in favor of faster-growing connected device and next-generation data center opportunities.

PC makers are changing their tablet strategy. David McQueen, research director at ABI Research, said that Dell and HP made the decision to shy away from the tablet market and will instead concentrate on providing 2-in-1 systems based on Microsoft Windows.

ABI Research predicts Dell’s and HP’s strategies, though they differ from the former trend, will work since each company is targeting the enterprise upgrade market, an area in which Apple has yet to launch product.

Apple and Samsung’s tablet shipments fell from 62 percent to 54 percent. ABI Research says Amazon and Huawei will focus on tablets despite the dwindling figures.

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