Paul Otellini, Intel's outgoing CEO and a 40-year veteran of the company, gave his last earnings call last week. And the results were, well, a little bit less than sanguine. The company’s profits in the first quarter of this year were US $2 billion, down 25 percent from the last quarter of 2012.
That's a pretty big decline for the world's biggest chip company. And the culprit, if you had to choose just one, seems to be declining PC sales. A few weeks ago, analysis firm IDC reported that the number of PC shipments in the first quarter of 2013 was down 13.9 percent from what it was a year ago—the steepest such decline since the company started tracking shipments in 1994. Late last week, private equity firm Blackstone said it is dropping plans to cobble together more than $24 billion to buy Dell, citing the health of the PC market as one of the reasons for the change of heart.
Intel, in theory, is in a much better position to rebound from declining PC sales than Dell is. Consumers are spending their PC money on new tablets and smartphones, and Intel has been gearing up to make a dent in the mobile market. This year, it is expected to begin releasing a series of Atom chips that boast a microarchitecture, code-named Silvermont, that is truly optimized for low power. The campaign will reportedly start with chips for low-power servers, followed by tablets, and then smartphones. (For those who want to follow along, the code names for those chips are Avoton, Bay Trail, and Merrifield, respectively.)
How much of an impact these chips will make is anyone's guess. Although Intel has already inked a few deals with mobile companies, this is a big departure for the company. "The PC is like a huge flywheel driving you in one direction," analyst G. Dan Hutcheson, CEO of VLSI Research, told me last year, not long after Otellini announced his resignation in November. The challenge for the company will be whether it can "become as light and as fast-moving as Qualcomm and Nvidia."

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