Intel reports mixed Q2 as cloud and IoT strategy gets off to a rocky start

21 Jul 20164 Shares

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Intel CEO Brian Krzanich: chip giant pins its future on cloud server and IoT ambitions while warily watching struggling PC market

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In mixed results for Q2, Intel reported slow growth in data centre and internet of things (IoT) chip sales – the two areas the chip giant is pinning its future hopes on.

Just three months ago, Intel announced 12,000 job cuts as part of a major $1.2bn restructure to pivot away from a dependence on smartphone and PC chips and embrace the future of cloud and IoT. This included reducing its workforce in Ireland by between 200 and 300 workers.

However, this strategy appears to be off to a rocky start.

‘While we remain cautious on the PC market, we’re forecasting growth in 2016 built on strength in data centre, the internet of things and programmable solutions’
– BRIAN KRZANICH, INTEL CEO

In its Q2 Intel results, Intel reported revenues of $13.5bn and an overall profit of $2.9bn.

Out of this, the company’s data centre group reported revenues of $4bn, up just 1pc.

Sales in its IoT group came in at $572m, down 12pc.

Sales in the Client Computing Group were down 3pc to $7.3bn due to weak PC sales worldwide.

“Second-quarter revenue matched our outlook, and profitability was better than we expected,” said Brian Krzanich, Intel CEO.

“In addition, our restructuring initiative to accelerate Intel’s transformation is solidly on-track. We’re gaining momentum heading into the second half.

“While we remain cautious on the PC market, we’re forecasting growth in 2016 built on strength in data centre, the internet of things and programmable solutions.”

 

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com