Intel Reports 15% Decline in Personal Computer Supply Shipments

Headwinds persist for Intel Corp. as they continue to face a difficult consumer environment.

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Intel Corporation just reported their second quarter results with revenues of $13.5 billion, up 3 percent year-over-year on non-GAAP gross margin of 61.8 percent. Intel also reported non-GAAP operating income of $3.2 billion, net income of $2.9 billion and EPS of 59 cents. The company generated approximately $3.8 billion in cash from operations, repurchased $804 million in stock, paid $1.2 billion in dividends during the quarter. Intel's restructuring initiative is solidly on-track, accelerating Intel's transformation to a company powering the cloud and billions of smart, connected devices.

Buried within the supplemental information of this report is continued evidence of weakness in personal computer shipments. Intel and other PC suppliers have been facing a tough consumer environment for a few years and this second quarter was no different. Client Computing Group Platform revenues were down 3% year over year. This could have been worse as unit volumes were down 15% in that same time period, only offset by a 16% increase in average selling prices. 

Client Computing Group Notebook, Desktop and Tablet Platform Key Drivers

Q2 2016 compared to Q2 2015:

- Notebook platform volumes decreased 5%
- Notebook platform average selling prices increased 2%
- Desktop platform volumes decreased 7%
- Desktop platform average selling prices increased 1%
- Tablet platform volumes of 5 million units decreased 49%

First six months of 2016 compared to the first six months of 2015:

- Notebook platform volumes decreased 4%
- Notebook platform average selling prices increased 1%
- Desktop platform volumes decreased 5%
- Desktop platform average selling prices increased 4%
- Tablet platform volumes of 9 million units decreased 47% 

Intel faces a tough road ahead as they push towards cloud and mobile initiatives while continuing to be a market leader in the struggling personal computer industry. The $32 Billion acquistion of ARM Holdings by Softbank earlier this week helps to highlight just how late to the party Intel has been on mobile. 

CEO

Asif Khan is the CEO and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

From The Chatty
  • reply
    July 20, 2016 2:20 PM

    Asif Khan posted a new article, Intel Reports 15% Decline in Personal Computer Supply Shipments

    • reply
      July 20, 2016 2:35 PM

      RIP computers. I knew it was just a fad, like the cb radio

    • reply
      July 20, 2016 2:39 PM

      http://buyersguide.macrumors.com/#Mac is probably a playing a role in this, too.

      Wish they'd ship new MBP's already :(

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        July 20, 2016 3:00 PM

        Apple's Q2 sales were also down. People just aren't buying new computers very often anymore.

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          July 20, 2016 3:14 PM

          I'm betting that has a lot to do with all the outdated models.

          I'm jonesing for a new MBP, and I know many colleagues and friends are too. But as the link shows, 6 out of 7 models are "DO NOT BUY", and so we wait.

          Aside from the Macbook (92 days since update) and iMac (281 days since it was updated), everything is way outdated (some, like the Mac Pro model, are closing in on 1000 days without an update).

          Not sure what's going on at Apple, but this is very unusual :(

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          July 20, 2016 3:16 PM

          Their Macs haven't been updated in forever. Its been the longest gap in releases they've ever had, which is saying a lot given how slow their refresh cycles already were.

          I think they're waiting on Kaby Lake since that has integrated Thunderbolt 3 support.

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            July 20, 2016 3:17 PM

            I think it also speaks to the fact that demand is not high enough to justify as frequent refreshes as they once did

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              July 20, 2016 3:37 PM

              I think it's going to happen with phones/tablets eventually too, the next 5 years are going to be rough unless we see some software that blows us all away that requires some new fancy shit

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                July 20, 2016 3:38 PM

                phone replacement cycles are already slowing, but they're still at like 2.5 years per device and not the 5-6 that PCs are at. They've got more room to grow too since gaming is more accessible there as is VR.

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              July 20, 2016 3:55 PM

              That is also a factor. That said, there were at least annual refreshes even when demand dropped. Hardware is also a factor. Between diminishing returns on performance (the difference between Haswell and Skylake is minimal except in IGP) and waiting on Thunderbolt 3 it makes sense that refresh cycles will slow.

              TB3 and USB 3.1 finally being integrated on the chipsets sounds like the right time to finally have a big hardware update across the board, not just Skylake for some of their laptops.

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          July 20, 2016 8:29 PM

          I went 6+ years between computers this time around. I'm curious how long it'll be before I do a rebuild again.

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            July 20, 2016 9:00 PM

            My i5 750 is getting close to 7 years now. I upgraded my GPU twice in-between, upgraded my 4 GB of RAM to 8 GB, and went full SSD. But upgrading the CPU and motherboard every couple of years isn't sensible anymore like it was 20 years ago.

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          July 20, 2016 10:30 PM

          It's because the MacBooks are too good. My 2012 MacBook Pro still runs like new, and I don't notice a big difference between that 2012 one and my brand new 2016 one aside from SSD performance.

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        July 20, 2016 3:19 PM

        My MBP sounds like a lawnmower. I need a new one badly, but I am holding out for the refresh :(

      • reply
        July 20, 2016 10:22 PM

        you mean the Macs that use Intel processors too? haha

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      July 20, 2016 2:42 PM

      PC Gaming Status: DEAD

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      July 20, 2016 2:54 PM

      Damn. And this was going to be the Year of Linux, too

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      July 20, 2016 2:58 PM

      Where do you think intel should be going? Didn't they pull out of the mobile market?

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        July 20, 2016 3:05 PM

        Pretty sure they're doing great with servers and assorts cloud hardware.

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          July 20, 2016 3:10 PM

          Correct they are growing in data centers and cloud computing.

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            July 20, 2016 3:24 PM

            They're pushing hard at both ends: in cloud computing/data centers and in connected home. I think they see that the future is thin clients and other connected devices and the massive support infrastructure that makes them work.

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      July 20, 2016 3:03 PM

      Not surprising. We haven't done much to push personal computing for many years. Especially now with the offload of everything to the cloud again. It's going to take another shift in computing to bring demand for a powerful personal computer back. My parents have had the same computer for many years now and there's pretty much no reason for them to upgrade as long as the OS continues to support the hardware.

      Gaming will continue to be there, but the market for that is small.

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        July 20, 2016 3:05 PM

        I think the only thing that's "in the pipe" and realistic enough in the next several years to revive the personal computing industry would be finding an application of VR that the masses would be interested in.

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          July 20, 2016 3:06 PM

          and which won't be better/easier on a phone based VR solution shortly after

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            July 20, 2016 3:07 PM

            Yep, it would have to be something that would require high fidelity, not Pokemon Go in VR

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        July 20, 2016 4:02 PM

        Yeah. The effect of computer power growing so fast for so long is that computers today are awesome. My computer right now is 5 years old (with a newer GPU) and it's still great for gaming, but if I didn't care about gaming I could use this machine for another 5 years easily.

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          July 20, 2016 4:06 PM

          Yeah, you can even see it in the posts around here these days. Plenty of people still rocking 2600K's that don't feel the need to upgrade their CPU, only their GPU. A 2600K is like 6 years old at this point.

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            July 20, 2016 4:15 PM

            Yep, that's me! 2500K, the CPU of the decade!

            Honestly at this point, a huge boost in Lightroom performance would be more likely to get me itching to upgrade. Right now I'm looking at two Intel generations from now (cannonlake) in early 2018, hopefully. Already saving for it!

            Admittedly if I wasn't in school I may have already built a Skylake system but out of desire not necessity.

          • reply
            July 20, 2016 10:27 PM

            Q6600 :)

    • reply
      July 20, 2016 3:23 PM

      This really isn't surprising. How consumers interact and use "computers" has been changing since the advent of mobile devices. But, it's not just a shift from desktop to laptop to tablet kinda thing. Looking at the industry as a whole you see that there is a growing segment of people that use their phone as their primary computing device. It's easy to see why. It always has a connection (Sprint network not withstanding), and app developers have really honed in making app usage to be simple vs how traditional desktop application didn't always follow what a consumer would think is a logical flow.

      I've seen this trend even in my own parents. Mom migrated to a laptop from a desktop. Now she's on a tablet and her phone; which she uses more than the tablet.

      For Intel, their chips aren't enough of those devices.

      Also, just like with desktops, we're hitting that performance peak where it's "fast enough". Like when the pentium was fast enough to run MS Office at full speed people started to hold on to their current desktop longer and longer. We're seeing the same thing with mobile devices now. Other than 64bit and the ability access more ram, pure cpu speed has been having diminishing returns for mobile for a couple of years already. Other than the trendiness of it, people don't "need" to upgrade their mobile device as much these days.

      But, this crowd knows most of this already. I'm just killing time until it's quitting time.

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      July 20, 2016 3:25 PM

      Man, I just learned that Soft Bank bought ARM. Where the fuck was I when that came to light?!

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      July 20, 2016 3:48 PM

      Lol. I sold my intel stock yesterday. Wonder if it will go down to mid/low 20s again.

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      July 20, 2016 6:39 PM

      It's Intel's fault for releasing new generations of cpu's with only a 5% bump in performance for a 20% markup over the previous generation. Just look at the Broadwell-E 6950k, for $1700!!!

      I haven't upgraded my CPU in over 7 years. Now, if Intel actually made meaningful improvements (10+%) over the previous generation, AND added more cores, instead of sticking with 4 cores for Skylake, and pretty much all previous generations since AMD released the Phenom II for gaming computers, maybe they'd get me and other people to upgrade more often.

      I'm waiting for Zen to upgrade I think, since Intel's just going to slug along, while AMD's releasing 8 and 16 core CPU's in less than a year. Even if it's worse performance per core (it will be), it will be competitive in price, and offer a lot more cores than AMD has bothered with, and they have the money to make it possible, they're just shamefully greedy and are fine with stalling the industry by lowering the standards for generational improvements. Of course, if the performence per core isn't what I need for my games, then of course I'll go intel, but if it's in striking distance, then I'll want more cores since that's what Vulcan and DX12 will use.

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        July 21, 2016 1:00 AM

        You see the Zen specs they look HOT!

        http://www.guru3d.com/news-story/ams-zen-engineering-sample-specs-leaked.html

        Man their server side is at 32 cores I wonder if that is 64 threads HOLY SHIT!

        You are right man its all about the cores(Zen @ 3.2 ghz is more than enough you don't need more than that), I am sure once Zen drops(and the price owns) you will see Intel change its ways real fast.

        Intel CPUs do own and they have a 10 core 20 thread CPU out now but the price is mental, if they would drop the price substantially that be amazing.

        Its all on AMD and I think they will deliver, and we are all going to benefit.

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      July 20, 2016 7:00 PM

      If you have a computer that you bought in the past three years, there is no compelling reason to buy one.

      Hardcore gamers and people who need workstations are exceptions of course, but they aren't huge segments of the market.

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      July 20, 2016 7:00 PM

      Still just boggles my mind how Intel dropped the ball so hard on both video cards and mobile.

    • reply
      July 20, 2016 8:47 PM

      I like these financially driven coverage pieces. First time I've thought this site did something with potential beyond the standard fare.

      You should start a gambling site where we can buy shares in movies. Then when the box office reports come back, those the numbers we use. Winners get special tags in here or something.

    • reply
      July 20, 2016 8:50 PM

      Full disclosure, are you shorting INTC?

    • reply
      July 20, 2016 8:55 PM

      Maybe if they'd get around to actually fucking shipping my gtx 1080, the numbers would increase!

      • reply
        July 21, 2016 2:02 AM

        Bruh, you are thinking of NVIDIA :)

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          July 21, 2016 2:07 AM

          I was, but nvidia makes up part of the platform volumes too! If they can't supply the cards to the notebook or desktop vendors, they can't be shipped either :)

          Also, I just want my 1080 to arrive :(

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            July 26, 2016 8:56 AM

            two days ago grey McLaren. P1 I bought afterearning 18,512 Dollars..it was my previous month's payout..just a littleover.17k Dollars Last month..3-5 hours job a day...with weekly layouts..it's realy thesimplest. job I have ever Do.. I Joined This 7 months. ago. and now making overhourly.

            Here Going You Are>>>>>>>>>http://www.Alpha-Careers.com

    • reply
      July 20, 2016 10:13 PM

      Hey, I've been in the market for a new laptop since the release of the new 1070 and 1080 gpus. As soon as they integrate, they can have my cash. Everything else is fine in terms of design and features. I just want desktop gpu power in my laptop.

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        July 20, 2016 10:32 PM

        while it's the "same" chip, the clockspeed/TDP and accompanying memory with be significantly lower so ...does it really make any difference?

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      July 20, 2016 11:41 PM

      Cool article, here are some thoughts on the future of CPUs and the PC etc:

      Once the Neo and Scorpio get released I believe there is going to be a big change for the PC and the core requirements will go up which in term will be very positive for CPU sales. Since both new consoles will have 16 logical cores it will be like the days of the Xbox 360 and PS3 where the consoles had more cores then the average high end PC, this will definitely drive CPU sales.

      My guess is that the PC CPU requirement for logical cores will be going up(I would guess to 8) and the demand for a new CPUs will be back to normal this is just a transitional period.

      I would say within a year(2017 and on) give or take the majority of games will focus on logical core requirements @ 8 and up and it will be just like the GHZ req as the driving factor of CPU sales. Many still don't trust that ghz is no longer what matter most is modern software design and is not how we design our applications now. The problem is most games are not really showcasing that change clearly on screen when you play, the game just works and no one is exposed to how it is all working under the metal.

      Soon games will not just be static content and we will have to consume large amounts of cores when most of the game worlds will be dynamic. Especially if VR grows/matures and gets full length games and the detail and interactivity increases and we want to simulate real world interactivity and detail you going to want 32+ core CPUs in order to achieve that. Right now the majority of game worlds are just static polygons, assets, etc that you cannot interact with and are just static props. I believe VR will change this, but it will take time since a lot of effort will be involved in such detail and interactivity. I just hope the cost of games and budgets don't hold back this evolution of video games for if it doesn't proceed neither will VR(in my opinion). You can only play so many small VR game demos, customers are going to expect more if it is to stay.

      Games need to start pushing the core requirements and have good scaling and promote the benefit as to what you get with 8 cores that you can't with 4. I believe the new consoles will push this change. Once the average gamer can see the difference on a PS4 vs a NEO or a mid-range PC vs a High end PC then sales will pick up once again. As we know consoles pretty much drive everything in games so this is why I wager the new 16 logical core consoles are going to be huge for the PC and their CPUs.

      I am not worried about the current PC's CPU numbers, it just a matter of time I believe 2017 is going to be awesome and 2018 will be off the chain. The new consoles are really the best thing to happen to the video game industry, it was very much needed for the industry as a whole.

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        July 21, 2016 12:16 AM

        Neo has the same CPU as the ps4, doesn't it? Just clocked a little higher. Don't know about Scorpio, perhaps it's not completely settled yet.

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          July 21, 2016 12:36 AM

          Both are supposed to be Zen variants with 8 cores and 16 threads.

          MS Scorpio is using a Zen 8 core 16 thread CPU : https://www.techpowerup.com/223385/microsoft-xbox-scorpio-soc-powered-by-polaris-and-zen. There are more sources all over the net I think it was even in the E3 slides as well, and interviews.

          Yeah Sony's specs are not settled yet. Having said that Sony did not announce Neo at E3 there is no way they have half the cores as MS and have a under powered console that be suicide. They would be insane not go for the Zen CPU as well. I friend told me not to worry, for what ever that is worth. Also if they want to do 4K at those low CPU speeds they need the cores or else good luck with that(my opinion).

          If Sony does not go for the Zen CPU it be the first time they would not go all out on their hard ware I bet money there is no way the would risk that and their reputation.

          Basically those leaked NEO specs that mention a 8 core cpu is apparently referencing a Zen CPU which doubles the PS4's threads.

          Will see next year hey, but I would bet money Sony will match MS if not try to out do them, which is a win for all of us. Next year will be insane.

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            July 21, 2016 1:01 AM

            Yes, looks like you're right, ps4 will be zen. Interesting!

            http://vrworld.com/2016/05/11/amd-confirms-sony-playstation-neo-based-zen-polaris

            Eurogamer think scorpio will be vega, not polaris, though they are only guessing, of course.

            http://www.eurogamer.net/articles/digitalfoundry-2016-xbox-one-project-scorpio-spec-analysis

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              July 21, 2016 1:26 AM

              Awesome hey! I am so happy its going to own, still a Polaris(if that is what ends up in the NEO) is pretty much a 970 and in a console it will be even faster(maybe 980 grade) so that is pretty rad.

              Cool, thanks for the link, man if the Scorpio will be Vega that will be INSANE!

              Is it 2017 yet :( , can't wait, I have a feeling things are going to explode.

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            July 21, 2016 1:29 AM

            there is no way they have half the cores as MS and have a under powered console that be suicide."

            Sony has tremendous inertia at this point. As long as they are priced in line with or cheaper than Microsoft they have nothing to worry about. It wasn't specs that won Sony this generation, it was the fact that their console was $100 cheaper. The PS4 being faster than the XB1 is just gravy.

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      July 21, 2016 7:16 AM

      Did my part.

      Bought an i7 6700k 2 weeks ago for a rebuild. Quite enjoying it so far.
      (up from an aging i7 920)

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