Intel Q1 Revenue Drops; CEO Otellini Highlights New Growth Areas


Intel reported $12.9 billion in first-quarter revenue Tuesday, marking a slight jump from the $12.8 billion it reported during the same quarter last year.

The number, however, marks a 7 percent drop from the $13.9 billion Intel reported in the fourth quarter, a drop the chip maker attributed to continued fallout from the hard-drive shortage caused by October’s Thailand floods.

Intel said the shortage created a reduction in its overall inventory levels but that PC demand remained healthy throughout the quarter. Intel also projected that the shortage would have little to no impact moving forward, as the supply chain continues to stabilize.

[Related: Intel Market Share Surges To 10-Year High]

Intel CEO Paul Otellini used the first-quarter earnings call to point to a number of new products as sources of growth for next quarter. The first is Ultrabooks, the ultrathin notebook form factor the chip maker introduced last year.

"Ultrabooks are reinventing computing with new form factors, high performance, better battery life, advanced security and other exciting new features," Otellini said. "With more than 21 designs already shipping and more than 100 designs in the pipeline for 2012, we are very pleased with our progress and, yet, this is just the beginning."

New Ultrabook form factors, including hybrid tablet-PC designs and touch-screen-enabled devices, are slated to launch later this year, he said. The new designs are intended to combine the compute power of a traditional notebook PC with the convenience and portability of a tablet, he added.

Otellini also noted that Intel is working to provide Ultrabooks at more "mainstream price points" by the end of the year. Today, these super-thin PCs tend to sell for between $800 and $1,200 from OEMs including Dell, Hewlett-Packard and Lenovo.

Otellini cited Intel’s new partnerships in the smartphone space as a growth opportunity for the second quarter as well. At this year’s Consumer Electronics Show in January, the chip maker unveiled new "multiyear, multidevice" alliances with Motorola Mobility and Lenovo. The companies are expected to release new smartphones later this year running Intel’s Atom Z2460 Medfield flagship mobile processor.

Meanwhile, at the Mobile World Congress event in February, Intel struck new alliances with Chinese smartphone maker ZTE, Indian smartphone maker Lava, and Orange, a brand of France Telecom. All three partners have signed on to launch new products based on Medfield as soon as this summer.

Otellin pointed to Ivy Bridge, Intel’s next-generation and highly anticipated 22-nm microarchitecture, as the third offering that promises new growth opportunities for the company. The architecture, which will be the first from Intel based on tri-gate "3-D" transistor technology, already has started shipping and, according to Otellini, demand has been healthy.

"Ivy Bridge will be our fastest-ramping product ever, comprising nearly a quarter of our microprocessor volume in Q2 alone and crossing over 50 percent of our microprocessor shipments last fall," he said during the earnings call.

Otellini did not give an exact release date for Ivy Bridge but said customers and OEMs will "soon see system availability."