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As Earnings Disaster Strikes, Intel Crying Inside

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[qi:011] A few weeks ago Terry Gou, chairman of Taiwan-based Hon Hai Precision Industry Co., the world’s largest original equipment maker, warned that the troubles facing the technology industry (because of the global economic downturn) were much steeper than people realized. His comments were met with skepticism. Perhaps more should have listened. Intel today announced that the sales for the fourth quarter of 2008 will be at least 20 percent lower than its previous forecasts, which it had already slashed to begin with.

Given that Intel (s INTC) supplies chips to every major PC maker, it is a good proxy for the PC ecosystem and the troubles that will ensue. Dell (s DELL), for instance, is bracing for a rough 2009. Other device makers aren’t immune either. Memory-chip makers are hurting as well. The slower PC sales also impact Microsoft (s MSFT) as it impacts the total sales of Windows operating system and other applications. 2009 isn’t going to be an easy one.

6 Responses to “As Earnings Disaster Strikes, Intel Crying Inside”

  1. All this doom and gloom isn’t going to last forever, they should be happy because their rivals are hurting even more than they are… so if they invest heavily now, they will be that much further ahead when things do improve.

    Jon – Where’s Your Traffic Going?

  2. 2009 may be a rough year for Microsoft and Intel since Microsoft is on the verge of releasing Windows 7. I have an upgrade cycle for my laptop, and it’s due in May 09 — but I may wait it out until a few months after 7 is released. Who wants to buy a computer and then upgrade it in a few months?

    Q1 and Q2 09 are going to be really bad. Depending on when Microsoft releases 7, Q3 may also be bad. But Q4 might be better than downward-revised expectations state, since more people who have held off upgrading for 9-12 months capitulate.The key for Microsoft may be free upgrade coupons for computers sold with Vista after a certain date, as they have done previously.