Positive signs
A few years ago it would have been at the very least incongruous to group Intel and Qualcomm together, but times they are a-changing. For some time the two companies have been attempting to encroach on each other's territories, but they also remain bellwethers of the PC and mobile phone markets, respectively.
Intel has yet to have anything like the presence in mobile phones that it would like, but that didn't stop CEO Paul Otellini from attributing his company's fifth successive quarter of record revenue to the mobile device market.
"We achieved a significant new milestone in the second quarter, surpassing $13.0 billion in revenue for the first time," said Otellini. "Strong corporate demand for our most advanced technology, the surge of mobile devices and Internet traffic fuelling data centre growth, and the rapid rise of computing in emerging markets drove record results. Intel's 23 percent revenue growth in the first half and our increasing confidence in the second half of 2011 position us to grow annual revenue in the mid-20 percent range."
This quote has resulted in some headlines that will doubtless please Intel as it strives for mobile credibility, but it also serves as another reminder that there's a lot more money to be made from the mobile device revolution than just the sale of handsets. On the PC side of things, while Intel cut its forecast it pointed to healthy growth in BRIC countries as a positive.
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Intel Quarterly Results |
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|
Q2 2011 |
vs. Q1 2011 |
vs. Q2 2010 |
|
|
Revenue |
$13.1 billion |
up 2% |
up 22% |
|
Operating Income |
$4.2 billion |
down 2% |
up 6% |
|
Net Income |
$3.2 billion |
down 3% |
up 10% |
|
Earnings Per Share |
59 cents |
flat |
up 16% |
|
Non-GAAP results exclude certain acquisition accounting impacts and expenses related to acquisitions and the related income tax effects of these charges. |
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Qualcomm pointed to healthy sales of mobile devices containing its processors and/or modems in delivering a 35 percent year-on-year increase in revenue. "Qualcomm delivered strong year-over-year results again this quarter as our business performed well across all key guidance metrics. In addition, we successfully completed the acquisition of Atheros, positioning us to further expand our opportunities going forward," said Paul Jacobs, chairman and CEO of Qualcomm.
"Looking forward, we continue to see healthy growth in CDMA-based device shipments of approximately 18 percent in calendar year 2011, and we are pleased to be raising our revenue and Non-GAAP earnings guidance for the fiscal year, driven primarily by strong global smartphone adoption and the addition of Atheros."
Here's a table comparing some key metrics with the same period last year.
These results are reassuring for the tech business on the whole. Intel indicates that weakness in western PC markets is being offset elsewhere, while Qualcomm has raised its earnings guidance based on optimism about the smartphone market. The markets seem to have been hoping for more, however, as both of them experienced a small dip in their share prices, and whether their smaller competitors share their optimism remains to be seen.
