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Apple’s Snub Finally Hits Intel: Operating Income Drops by 34% in the Consumer Market Despite Successful Alder Lake Launch

Intel’s first-quarter earnings took a hard hit in the Client Computing Group (CCG) with a drop of 13% in revenue and 34% in operating income. The operating income fell from $4.3 billion to $2.8 billion while the revenue shrunk from $10.7 billion to $9.3 billion.

Intel attributes this drop primarily to the ramp down of Apple CPUs as the Cupertino giant has been designing its own arm SoCs for a while now. Furthermore, demand for lower-end SKUs (and price cuts?) and education/student products also reduced the ASP. As for the operating income, the 7nm node is still nowhere as profitable as the highly mature 14nm process which powered Skylake designs. Therefore, expect this trend to continue for the time being.

The data center business grew by a healthy 22%, from $4.9 billion in Q1 2021 to $6 billion in Q1 2022. Operating income remained flat.

Intel is investing quite a bit into its Graphics Division. In the first quarter of 2022, the operating income stood at -$390 billion, indicating a sizable inflow of capital into the Koduri-led business. The Foundry Division continued to report minor losses. The first quarterly revenue grew from $103 million to $283 million while the operating income increased from -$34 billion to -$31 billion.

Areej

Computer hardware enthusiast, engineering dropout, and PC gamer. Former co-founder of Techquila (2017-2019), a fairly successful tech outlet. Been working on Hardware Times since 2019, an outlet dedicated to computer hardware and its applications.

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