Intel cuts forecast amid broad spending slowdown

Intel cut its revenue forecast Wednesday, the latest sign that the global financial crisis is leading to a sharp slowdown in IT spending.

Intel on Wednesday cut its revenue forecast for the fourth quarter, the latest sign that the global financial crisis is leading to a sharp slowdown in IT spending.

Intel cited "significantly" weaker-than-expected demand for its products worldwide, and said companies involved in manufacturing PCs are aggressively reducing their component inventories.

Intel now expects its revenue for the quarter ending Nov. 28 to be about US$9 billion, plus or minus $300 million, down from its earlier forecast of $10.1 billion to $10.9 billion, the chip maker said. Analysts had been expecting revenue of $10.3 billion, according to a poll by Thomson Reuters.

Separately Wednesday, IDC said it was lowering its forecast for worldwide IT spending in 2009 as a direct result of the financial crisis. The analyst company expects IT spending to grow by just 2.6 percent next year compared to 2008, down from its earlier forecast of 5.9 percent growth.

Growth in IT spending in the U.S., Western Europe and Japan will hover around 1 percent next year, IDC said. Emerging markets such as Eastern Europe and Latin America will see healthier growth, but not in the double digits IDC had previously expected.

Spending on hardware, with the exception of storage gear, will actually decline next year, IDC said, though software and services will fare better. The industry will lose more than $300 billion in revenue over the next four years as a result of the slowdown, it estimated.

The downturn in spending won't be as grim as it was in the early 2000s, however, according to IDC.

"Companies currently don't have the asset and spending 'overhang' that enabled them to put off purchases after Y2K and the dot-com bubble. As a result, there will be greater pressure for them to continue making IT investments in order to stay competitive," the company said.

Intel had warned in its earnings call last month that it was difficult to figure out how the downturn would affect its business. It joins SAP and Sun Microsystems, among others, that have warned of slowing business.

The news pushed Intel's shares down 7 percent in trading after-hours, to $12.59. Its shares ended the regular trading day down 3 percent at $13.52.

(IDC is owned by International Data Corp., the parent company of IDG News Service).

Join the PC World newsletter!

Error: Please check your email address.

Tags processorsintelmarket

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?