The strategy of Intel indicates that the computing processor company will not rely on the dwindling PC business for future revenue growth.
IT market research agency Gartner said worldwide PC shipments fell 7.7 percent to 73.7 million units in the third quarter of 2015.
Desktop PCs fell in high-single-digits, while the segment of notebook PCs and premium ultramobiles such as the MacBook Air and Microsoft Surface Pro posted a low-single-digit decline.
IT market intelligence firm IDC says worldwide PC shipments dipped 10.8 percent to 71.0 million units. “PC market continues to contract as expected, but we remain optimistic about future shipments,” said Jay Chou, research manager, IDC Worldwide PC Tracker.
IDC said PC shipments will be hampered in the short run by the availability of a free upgrade to Windows 10, while the improved PC experience across user segments should drive longer-term demand for new PC hardware that is expected help stabilize the market in 2016 and beyond.
Brian Krzanich at its investor conference said Intel’s strategy will be to utilize the company’s core assets to move into profitable, complementary market segments.
He described Intel’s Client Computing business as a strong foundation, which delivers healthy profits and critical intellectual property to the rest of Intel. The Data Center, Internet of Things (IoT) and Memory businesses are expected to be growth engines for the company.
Intel said R&D plus MG&A spending as a percent of revenue is expected to be down half a point in 2016.
Capital spending of Intel will be $10 billion, plus or minus $500 million (includes approximately $1.5 billion for Memory).