Intel cuts revenue forecast

Intel said on Thursday that it expected first-quarter revenue of $12.8 billion, plus or minus $300 million — about 7% lower than its earlier forecast of $13.7 billion, plus or minus $500 million.

Though dominant in the market for chips used in PCs, Intel has been slower than rivals such as Qualcomm to adjust in recent years to the growing popularity of smartphones.

When Microsoft wound down support for its Windows XP operating system last April, Intel had expected a bounce in demand from small and medium-sized businesses. But this has not happened.

Businesses and consumers are taking an "if it ain't broke, don't fix it" attitude to their old PCs, Summit Research analyst Srini Sundararajan said.

According to BlueFin Research Partners, 75 million-76 million PCs will be shipped worldwide in the first quarter, a decline of 8-9% from the preceding quarter.

Intel, whose historic "Wintel" alliance with Microsoft once delivered breathtakingly high profit margins, has been trying to offset the impact of slower PC upgrades by making chips for devices such as "2-in-1s", which function as both laptop and tablet.

Intel said the mid-point of its gross margin range would remain at 60%, plus or minus a couple of percentage points.