| Intel Earnings Hit Hard by PC Buying Trends |  By Paul Thurrott | Intel this week revealed that it isn't immune to the current trends sweeping the PC industry: Profits and net income at the world's largest maker of microprocessors dropped almost 30 percent year over year, as interest in traditional PCs continued to wane in the most recent quarter. Intel's problem? Its chips are rarely used in the quickly growing market for PC replacements such as smartphones and tablets.
It was an expected but inauspicious start for new Intel CEO Brian Krzanich. Related: "Gartner: PC Market Decline Continued in Q2 2013" | | ADVERTISEMENT |  Follow us on Twitter! Don't miss real-time updates on articles, virtual events, white papers, Essential Guides, webcasts, and more. Meet your peers and tell us what you think. Also look for us on Facebook and LinkedIn.
| | | "Looking ahead, the market will continue buying a wide range of computing products," Mr. Krzanich said in a prepared statement. "We will leave no computing opportunity untapped. To embrace these opportunities, I've made it Intel's highest priority to create the best products for the fast-growing ultra-mobile market segment … I am more confident than ever about our opportunity as a company."
Strong words. But Intel's strategy doesn't really appear to have changed at all: Mr. Krzanich also noted that "Intel Atom and Core processors and increased SOC integration will be Intel's future." Those products are also notably Intel's present. Intel earned a net income of $2 billion on revenues of $12.8 billion, down 29 percent and 28 percent year over year, respectively. Two-thirds of Intel's revenues come from the sale of microprocessors, and most Intel microprocessors are still used in mainstream PCs—not by the smartphones and tablets that customers are buying in ever-growing numbers. PC sales, meanwhile, are down dramatically. According to data from both Gartner and IDC, PC sales dropped about 11 percent overall in the most recent quarter, and Gartner noted that it was a record fifth straight quarter in which sales fell year over year. Looking more closely at Intel's numbers, revenue in Intel's PC client group was down 7.5 percent year over year, roughly in line with what we're seeing in the wider industry. So Intel is going to need to step it up in the mobile market, which the firm admits it responded to too slowly. To that end, Intel sees a bigger emphasis on the next-generation Atom chips, code-named Bay Trail, which it says will offer the performance that PC buyers expect, combined with the battery life that tablet buyers expect. The resulting devices, which will include true tablets, hybrid PCs, and touch-based Ultrabooks, will be quite inexpensive—"down to the $200 to $400 range," Mr. Krzanich said—and be much more competitive with the market-leading Android devices, and with Apple's iPad. Some Bay Trail-based tablets will sell for as little as $150, he claimed. Of course, Intel's focus on the low end of the market has its own problems, as the industry's previous emphasis on low-end netbooks proved. Higher-volume, low-cost devices will further erode the value of PCs and devices, and drive consumer cost expectations ever lower. I explained this previously in "Explaining Windows 8 PC Sales Over the Holidays," noting that an emphasis on very-low-cost machines drove Windows sales to artificially high heights. Obviously, the same is true on the hardware side. Intel should eventually see some success with products that compete directly with PCs, like tablets and hybrid PCs. But smartphones are the biggest market for personal computing devices, and here Intel has seen nothing but defeat. Indeed, in the most recent quarter, Intel's business unit responsible for smartphone chips posted an operating loss of $608 million. Long term, this is the firm's biggest vulnerability. Related: "Microsoft's Vision for the Replaceable PC" | | Comment on this article... |
| Nokia Smartphone Sales Skyrocket as Losses Fall | | By Paul Thurrott | In a preliminary financial report for the second quarter, Nokia reports that it expects to lose $364 million on revenues of $7.5 billion. But the news from the firm's devices and services business is mixed: Nokia sold a record 7.4 million Windows Phone-based Lumia smartphones in the quarter and trimmed its operating losses significantly. But it still sold far fewer smartphones overall than it did in the year-ago quarter.
Most of Nokia's revenues actually come from Nokia Siemens Networks, the network-equipment company that Nokia assumed full control of during the quarter. That division posted an operating profit of $10.5 million. Related: "US Wireless Carriers Speed Smartphone Upgrades" "We're pleased to report an underlying operating profit for the fourth consecutive quarter on a group level," Nokia CEO Stephen Elop said in a prepared statement. "We benefited from another strong performance at Nokia Siemens Networks, which continued to deliver well against its focused strategy. With our recent announcement to purchase Siemens's 50 percent stake in Nokia Siemens Networks, we believe we will create value for Nokia shareholders and look forward to strengthening Nokia Siemens Networks as a more independent entity." On the Windows Phone front, Lumia sales are racing upwards, and Nokia almost doubled its Q2 2012 Lumia sales of 4 million units in the most recent quarter. But the issue is that Lumias aren't selling as well as the firm's previous smartphone platforms. In Q2 2012, Nokia sold 10.2 million "smart devices" overall, including both Symbian and Windows Phone handsets. With Symbian now out of the picture, the Lumia line-up has big shoes to fill, and it hasn't yet risen to that challenge. That said, Nokia and Windows Phone have at least ousted BlackBerry as the third most frequently used smartphone platform. With RIM/BlackBerry selling just 6.8 million smartphones overall in the most recent quarter, most of them of previous-generation devices, Nokia Lumia by itself is now out-selling all of BlackBerry. And virtually all of Nokia's Lumia sales are of new, current-generation devices. "We are very proud of the recent creations by our Lumia team, from the Lumia 520—our most affordable Windows Phone 8 product, which has enjoyed a strong start—to the Lumia 1020, our star imaging product, which we unveiled to the world last week," the Nokia interim report notes. "Overall, Lumia volumes grew to 7.4 million in the second quarter, the highest for any quarter so far and showing increasing momentum for the ecosystem. During the third quarter, we expect that our new Lumia products will drive a significant part of our Smart Devices revenue." Looking forward, Nokia does expect unit sales of Lumia handsets to climb again in the current quarter, but it expects that the financial results for that business unit will remain "approximately negative 2 percent." The firm is preparing for the "ramp-up" of recently announced high-end Lumia smartphone sales as well as "new Mobile Phones devices." Nokia previously promised it would be launching new devices before the end of the year. Related: "Nokia Shareholders Express Growing Impatience with Turnaround Efforts" | | Comment on this article... |
| Latest Blog Posts | Windows Phone Book: Maps + Location Chapter is Complete (For Now)
Here is a second update to the Maps + Location chapter in Paul Thurrott's Guide to Windows Phone 8. This chapter was previously split off from the Search chapter and will in fact be heavily revised again in a future update to cover the Nokia HERE Maps and Drive/Drive+ apps. This version covers Bing Maps and Local Scout.
Nokia Lumia 521 First Impressions and Photos
This month, the Lumia 520 raced past the high-end Lumia 920 to become the world's most popular Windows Phone 8 handset. Here in the United States, T-Mobile customers—or really anyone interested in saving a lot of money—can purchase a variant of this device called the Lumia 521 that costs just $125 without a contract. These devices represent an unparalleled bargain, and not just for Windows Phones, but for smart phones generally.
Hands-on with Windows 8.1: The Windows 7 Upgrade
While much of my work with Windows 8.1 has involved updating Windows 8/RT-based PCs and devices to the new system, you can also perform an upgrade of sorts from Windows 7. In the Windows 8.1 Preview, at least, these options are limited, however, to a clean install or a partial migration.
Hands-On with Windows 8.1: System Recovery
In Windows 8.1, Microsoft has removed the Windows Backup tools that provided system image backup capabilities. This has triggered a new round of fear and loathing among those who appreciated the functionality of that offering. But the move is in keeping with the broader transitions Microsoft is making to devices and services in Windows and its other core product lines. And as I've noted in the past, the new way of doing things works quite well. | | Additional Resources | Fast, Flexible and Easy Server Backup
Disk-Based Backup for Windows and Linux Servers - and for Free! Click here to find out more.
Why VMware and Hyper-V Disk is Broken
Protection for virtual environments is a critical aspect of a strong and efficient virtual machine. Environments like VMWare and hypervisors require specialized backup, but the majority are vulnerable, being protected by generic systems.
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