Weak consumer spending offset by strong business orders helped Intel report earnings that narrowly cleared the financial bar it had lowered in August. The chip giant posted earnings of 52 cents a share on $11.4 billion in sales for the third quarter and guided margins and revenue up slightly for the fourth quarter.
Intel's report helped confirm that consumer PC demand remains weak and that Apple's (AAPL) success with the iPad tablet continues to erode the sales of notebooks and netbooks.
Analysts attribute Intel's 4% decline in Atom netbook chips directly to the rise of iPads.Apple has been expanding the use of its own processors that run its iPhone and iPad. The trend continues to the new version of Apple TV, where, thanks to Apple's A4 chip, Intel no longer plays a role. Intel CEO Paul Otellini praised Apple's reinvention of the tablet device on a conference call with analysts Tuesday. And while acknowledging that Intel missed the boat on Apple's iPad, Otellini promised there would be Intel inside mobile devices that run on Microsoft (MSFT) Windows, Google (GOOG) Android and Nokia (NOK) MeeGo operating systems in "the coming months and quarters." "We fully expect to participate broadly and profitably in this category, and that in the end, the tablet category will be additive to our bottom line and not take away from it," Otellini told analysts. The problem here is that investors fully expected Intel to already be a leader in this category. Investors didn't exactly cheer Intel's tepid performance and bold promises. The stock opened largely unchanged from its Tuesday close of $19.77. --Written by Scott Moritz in New York.
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