Intel's Q2 Atom revenue drops as netbook demand slows

20.07.2011

Despite the slow growth in PC unit shipments in the quarter, Intel's PC Client Group revenue went up by 11 percent year over year. Revenue for the Data Center Group, which deals in server products, went up by 15 percent year over year.

Intel's revenue in the main PC and server businesses went up due to strong corporate demand and "Internet traffic fueling data-center growth," Paul Otellini, Intel's president and CEO, said in a statement.

The netbook market is weak, but the overall PC market remains strong due to corporate demand, Otellini said on a conference call. Demand for mainstream PC chips -- the Core i3, i5 and i7 -- was two-thirds of overall Intel chip sales, Otellini said.

PC unit shipment growth will be around 8 percent for the full year, which is slightly below Intel's earlier guidance, Otellini said. However, Intel's chip revenue will retain its double-digit percentage growth based on higher-margin sales to corporate customers, Otellini said. Atom margins are lower, because the chips go into low-priced netbooks.

Netbooks were hurt by interest in tablets and low-priced laptops with full-sized screens, Otellini said. This quarter, Intel shipped its first dedicated Atom tablet chip, code-named Oak Trail, but Otellini views tablets as "additive" devices that address specific needs.