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Intel Notebook CPU Sales Grew by 54% in Q1 2021 but Prices Fell by 23%, Desktop Sales and Prices Fell by 4% and 5%, Respectively

Intel’s Q1 earnings report was a good indication of its position in the market. Although the quarterly revenue was higher than analysts’ predictions, it was still a fair lower than last year despite strong demand from all segments. The drop can be primarily attributed to the falling ASP (Average Selling Price) which itself is the result of increased competition and a dated lineup.

For example, while the notebook sales grew by a whopping 54%, much of this was blunted by the 23% drop in the ASP compared to last year. The desktop sales were more balanced with a drop of 4% and 5% in volume and ASP, respectively. Despite this, the Client Computing Group (CCG) recorded a YoY increase of 8% although the operating income decreased by a few percent.

Interestingly, as a result of the pandemic, the impact of seasonality on sales and ASP has been more or less nullified. As you can see in the below image, Q4 2020 and Q1 2021 were more or less the same in terms of revenue. While the desktop sales dropped by 19% on account of the anticipation of the Rocket Lake lineup (and the subsequent disappointment), the notebook sales were more or less the same with an increase of 5% in sales and a drop of 4% in ASP.

Intel’s Q2 outlook is more or less the same as Q1, with an overall revenue target of $17.8 billion, 2% lower than last year and nearly a billion lower than Q1. The gross margin is also expected to stay nearly the same, with an increase of just 1%.

Intel expects a lower CPU volume sold through the remainder of 2021 as the transition from 14nm to 10nm takes place. The 10nm production is expected to overtake the existing 14nm lineups in the second half of 2021, with the company aiming to ship over a million PCs a day. This will be largely due to the sales of the Xeon Ice Lake-SP parts and the upcoming Alder Lake-S units, with Tiger Lake and Ice Lake-U also adding significantly to the overall quantity.

During Intel’s quarterly earnings call, company CEO Patrick Gelsinger explained that there are no signs of weakening demand in the PC market, and therefore believes that the chipmaker will soon be able to ship more than 1 million personal computers per day, as was the case several years ago.

The demand for PCs continues to be very high, so the company itself expects that by the end of this year it will increase its shipments by double-digit percent. At the same time, the revenue is expected to fall in the first half of the year on account of the 14nm to 10nm transition.

Areej

Computer Engineering dropout (3 years), writer, journalist, and amateur poet. I started my first technology blog, Techquila while in college to address my hardware passion. Although largely successful, it was a classic example of too many people trying out multiple different things but getting nothing done. Left in late 2019 and been working on Hardware Times ever since.

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