Intel's PC business hammered as shift to mobile intesifies

Intel has slump in profits, as the IT industry shifts inexorably towards mobile computing, with the chip giant's PC business hit particularly hard.

Intel said it sales for 2012 hit $53.3bn, down 1.2 percent of the previous year. Profits were $11bn, 15 percent lower than 2011's $12.9bn.

Meanwhile, sales in its PC group fell three percent to $34.3bn for the year. This slump was exacerbated when looking at Intel quarterly results.

Sales for its quarter ending 29 December 2012 were $8.5bn compared to $9bn in the year-ago quarter - a six percent drop.

Worse still, these quarterly results were delivered after Microsoft had released the latest version of its Windows operating system, which would typically be expected to deliver a boost to PC sales.

Intel noted that other areas of its business saw growth on the year. The datacentre group noted a six percent rise in full-year sales totalling $10.7bn. On the quarter, the datacentre group sales jumped four percent over the same period last year, to $2.8bn.

"We made tremendous progress across the business in 2012 as we entered the market for smartphones and tablets, worked with our partners to reinvent the PC, and drove continued innovation and growth in the data centre," said Intel chief executive Paul Otellini.

"As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing."

Sagging PC sales have plagued much of the PC industry throughout the year. Gartner recently reported that worldwide sales are down some 4.9 percent on the year. Aside from a small group of vendors, nearly all PC manufacturers are seeing sales dip.

While lingering economic troubles have slowed demand for new PCs, the growth of the tablet sector has also been credited in large part for driving down traditional PC sales.