Despite all the doom and gloom about the PC industry being destroyed by tablets, Intel had a record year. The company raked in $54 billion over the course of 2011, good for a net income of $12.9 billion. Predictably, the PC Client Group was responsible for most of the revenue—$35.4 billion, an increase of 17% over last year. Revenue was up for the Data Center Group by the same percentage, but Atom revenue fell by 25% from 2010.
2011 | 2010 | vs. 2010 | |
Revenue | $54.0 billion | $43.6 billion | up 24% |
Gross Margin | 62.5% | 65.3% | down 2.8 pts. |
Operating Income | $17.5 billion | $15.6 billion | up 12% |
Net income | $12.9 billion | $11.5 billion | up 13% |
Earnings per share | $2.39 | $2.01 | up 19% |
In addition to slowing Atom sales, Intel also faced shrinking margins. The firm’s 62.5% gross margin for 2011 is 2.8 points lower than the same figure for 2010. Intel predicts its margins will grow to 64% over the course of 2012, though. Revenue is expected to hit $12.8 billion for the first quarter of this year. Intel isn’t making any predictions about the year as a whole, but it says $10.1 billion will be spent on R&D alone.
I suspect Sandy Bridge-E will help on the margins front, particularly when the EP version rolls out for servers. Intel will surely face more pressure from ARM-based devices in the mobile space. Whether Android support and Windows 8 can make the Atom more attractive for that market remains to be seen, but Ivy Bridge should at least help populate the market with more affordable ultrabooks.