Intel CEO Otellini Sees Signs Of Corporate IT Upturn - InformationWeek
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4/14/2010
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Bob Evans
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Intel CEO Otellini Sees Signs Of Corporate IT Upturn

"We are also seeing signs of corporate demand returning which we believe will continue to improve," said Intel CEO Paul Otellini during an earnings call in which the company announced a blowout quarter. He later added, "You are getting to the point where CIOs are feeling a bit better about their business."

"We are also seeing signs of corporate demand returning which we believe will continue to improve," said Intel CEO Paul Otellini during an earnings call in which the company announced a blowout quarter. He later added, "You are getting to the point where CIOs are feeling a bit better about their business."From the transcript of Intel's earnings call on SeekingAlpha.com, here are some of Otellini's comments about a first quarter that saw the company rack up record revenue of $10.3 billion and record operating profit of $3.4 billion:

**On the corporate IT market: "It was notable this quarter the demand for our higher end PC products was particularly strong which helped improve margins and profitability. Our mobile business set a new revenue record as demand for notebooks continues to be excellent. We are also seeing signs of corporate demand returning which we believe will continue to improve given the age of the corporate PC fleet and the compelling ROI that our new generation of servers presents."

**On corporate PC buying: "It is the first quarter where we have seen some real signs of PC purchases, corporate SKU's picking back up again. Some of that was wrapped around our new products, the Arrandale notebook products, but some of that was also even just some of our older SKU's that are classic running corporate SKU's also picked up. To me that suggests the average fleet of notebooks is four years old out there. The average fleet of desktops is five years old. You are getting to the point where as CIO's are feeling a bit better about their business it makes economic sense to swap these out just from an ongoing cost of ownership standpoint. They are doing that on their budgets as they free up a bit more money here and there. I think they will also make the tradeoffs between PCs and Servers and software as they go forward and right now hardware seems to be doing pretty well in that tradeoff."

**On his continued cautious outlook for the corporate market: ". . . and lastly now you are starting to see some corporate PC purchases re-emerge. I am still not going to go out on a limb and our customers certainly aren't going to go out on a limb and say there is a corporate refresh snapback coming. I think what we see this cycle is much more people are buying things to replace older machines because it is just cheaper."

**On the massive shift toward mobile computing: "I think the overall shift to mobility is one of the megatrends that is out there both from a consumer standpoint and from the corporate standpoint."

You can see the whole transcript with commentary from Otellini and CFO Stacy Smith here.

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