How healthy is the recovery of the PC industry?
Intel chief executive Paul Otellini said that demand for computers strengthened during the second quarter and got progressively stronger in June. Sales normally drop from the first quarter to the second quarter. But this time, second quarter sales were up 11 percent from the first quarter. Consumer laptop sales led the way. Desktop sales and enterprise sales were weak, but Atom (for netbooks, which are smaller than laptops) and server chips sold well. Most territories saw increases except for Europe, which saw sales fall 9 percent in the second quarter. Europe typically sees a 15 percent drop in the second quarter. 2. Is there a risk of an inventory buildup? Otellini said Intel saw inventories drop to healthy levels at major computer makers, among computer resellers, and in its own warehouses. Customers are now ordering enough inventory to refill their stocks. Typically, at this time of year, computer makers start ordering chips for back-to-school sales. Consumer laptops are likely to
