News from the NW’s struggling giants


Intel sees shares decrease 18% this year; Microsoft says it is not ditching mobile phone market.

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BY JACOB PALMER | DIGITAL NEWS EDITOR

Two of the largest employers in the Pacific Northwest are reacting to a slew of bad news.

Both Intel and Microsoft have recently announced plans to lay off workers and are now scrambling to limit losses.

The Oregonian’s tech reporter, Mike Rogoway, writes that “the honeymoon is over for Intel chief executive Brian Krzanich” as he prepares to release second-quarter numbers amid reports that Intel’s stock has dropped 18% over the last year.

Intel’s fortunes revived late last year amid unexpectedly strong PC sales, buying the company time to develop other markets for its chips. But the clock is running out: Second-quarter PC sales fell 9.5 percent, according to industry researchers at IDC. Since more than 60 percent of Intel’s microprocessors end up in PCs and laptops, Intel feels those falling sales acutely. When sales started to slide last spring, the chipmaker issued an early warning to investors.

Intel hasn’t issued any such warning this time out, and its PC sales are often better than IDC and Gartner suggest. But investors are worried. Analysts’ consensus forecast for second-quarter revenue is $13 billion, below the $13.2 billion Intel forecast in April and 6 percent below last year’s results. Wall Street sees continued weakness in the third quarter, suggesting Intel’s diminished forecast of a “flat” 2015 may be optimistic.

(SOURCE: OregonLive.com)

Up I-5 in the Seattle area, Microsoft is saying that it is not abandoning its place in the mobile phone market, despite reports of layoffs.

“Last week’s announcement was not about any change to our vision and strategy, but for sure it was a change to our operating approach,” [CEO Satya] Nadella said in an exclusive interview with ZDNet. “The way we’re going to go about it: I’m not going to launch a phone a day. I’m going to focus on a few phones that actually grab share that, in fact, showcase our uniqueness.”

When you have 3 percent share of the phone market, Nadella said, plus you also have a billion desktops, Xbox, HoloLens, Band, the company needs to focus on more than one thing.

(SOURCE: Portland Business Journal)

It will be interesting to see if these two companies that were built on innovation can successfully evolve in a market that seems to have left them behind.

 


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