Intel takes hit on profits as mobility unit suffers

US chip shop Intel recorded a whopping 55 per cent drop in net income for the first quarter of 2009, chalking up $647m against $1.4bn in the same period last year.

Group revenues also dropped 26 per cent year on year to $7.1bn for the first quarter of 2009, as unit shipments slowed and the average selling price (ASP) of chip s flattened out.

Intel’s mobility group took a big hit, with quarterly operating income plummeting to $267m in the first quarter of 2009, compared to $934m in the first quarter of 2008. Net revenue at the unit dropped from $3.5bn last year to $2.9bn in the first quarter of 2009 and the company said that revenue from its Atom microprocessors and chipsets was $219m, down 27 per cent sequentially.

Atom chips are used in the new breed of ultra portable netbook devices or MIDs (Mobile Internet Devices), which many industry players expect to be the next big thing in terms of potential markets. However, analysts have warned that Intel-based gadgets are expected to take a back seat to those powered by mobile industry heavyweight ARM.

Hear Intel’s view of how WiMAX is changing the game at WiMAX Forum Global Congress Amsterdam 1-3 June. Gordon Graylish, Vice President, Sales and Marketing Group, Deputy General Manager, Europe, Middle East and Africa, Intel (USA) will be speaking on 2nd June at 13.10. Visit www.wimax-vision.com to download the agenda.