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Windows 10 Anticipation Puts PC Sales on Skids

Intel's warning that revenues could be off by about $1 billion weighed on its shares Thursday, stoking fears that PC sales may remain weak until Microsoft ships its new Windows 10 operating system.

The chipmaker's revised forecast for the first quarter is revenue of $12.8 billion, give or take $300 million, compared to the prior prediction of $13.7 billion, give or take $500 million. Intel said lower than anticipated demand for business desktop PCs across the supply chain spurred the revised forecast.

Lower than expected Windows XP refreshes have impacted supply for its inventories, Intel said. Businesses and consumers are taking an "if it ain't broke, don't fix it" attitude to their old PCs, Summit Research Analyst Srini Sundararajan told Reuters. But with Microsoft's Windows 10 waiting in the wings, many PC buyers are likely putting off upgrades as well. As research by Redmond magazine and others is showing, many users plan to upgrade to Windows 10 and are awaiting the new hardware in the pipeline that will support it.

Like many other companies, Intel also said currency conditions in Europe will also affect revenues. That has led to an increase in PC prices in Europe, which has impacted demand, according to various reports. BlueFin Research Partners is forecasting about 76 million PCs will ship this quarter, a decline of 8 to 9 percent, Reuters reported.

Intel's datacenter business forecast remains unchanged, the company said.

Posted by Jeffrey Schwartz on 03/12/2015 at 11:42 AM


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