PCs generate minority of Intel's profit for first time

Chip giant drew over 50 per cent of operating profit last year from products outside Client Computing Group

Last year marked the first in which Intel drew the majority of its profit from outside its traditional PC stronghold.

Despite suffering an eight per cent fall in sales at its Client Computing Group, overall revenues at the chip giant fell just one per cent to $55.4bn (£38.7bn) in its fiscal year ending 27 December.

Client remained the largest revenue segment with sales of $32.2bn, but Intel’s other businesses generated 40 per cent of turnover and – for the first time – the majority of its operating profit.

The Data Center Group saw revenue rise 11 per cent to $16bn, the Internet of Things Group was up seven per cent to $2.3bn and the Non-Volatile Memory Solution Group witnessed a 21 per cent sales jump. Software and services operating segments saw revenue fall back two per cent to $2.2bn.

Analyst Gartner blamed the delay in Intel’s new Skylake platform for denting Windows 10 PCs sales in the fourth quarter.

Intel pointed out, however, that 14-nanometer products made up more than 50 per cent of client computing volume as of November.

Although the results sparked a five per cent fall in Intel’s share price last night, chief executive Brian Krzanich (pictured) said they demonstrated that Intel’s strategy is working.

“…Our results over the last year leave me increasingly confident in our strategy,” he said on a conference call, a transcript of which can be found here.

“While our outlook for the first quarter reflects some caution about overall demand, particularly in China, we continue to expect solid growth in the business in 2016.”

Boosted by its $16.7bn acquisition of Altera, which it closed one day into its new fiscal year, Intel raised its revenue growth guidance for 2016 to mid to high single digits.