The company now expects to post $12.8bn in first-quarter revenue.
Chip maker Intel has slashed its revenue outlook for the first quarter by about $1bn on weak demand for personal computers (PCs).
The company now anticipates to post $12.8bn in first-quarter revenue, down from its mid-January forecast of $13.7bn.
The drop in PC sales was especially from weaker-than-anticipated demand to upgrade from Windows XP by small and medium-size businesses, as well as increasingly challenging macroeconomic and currency conditions, particularly in Europe.
Intel said the mid-point of its gross margin range would remain at 60%, plus or minus a couple of percentage points, and expectations for R&D and MG&A spending and depreciation in Q1 will remain unchanged.
The company posted a 6% rise in its full-year 2014 revenues of $55.9bn and reported a record full-year unit shipments of PCs, servers, tablets, phones and the Internet of Things.
The International Data Corporation (IDC) has lowered the PC outlook for 2015. Worldwide PC shipments are estimated to decline by -4.9% this year, a drop from the earlier forecast of -3.3%, while growth projections for 2016 and 2017 had a slight increase.
IDC estimates total 2015 volume to be 293.1 million PCs and 291.4 million in 2019.
In value terms, the PC market dropped -0.8% to $201bn in 2014. It is projected to fall another -6.9% in 2015 and reach $175bn by 2019.
IDC said while recent processor updates have generated positive reception, more significant product refreshes from Intel (Skylake platform) and Microsoft (Windows 10) will be released later in the year.