Dell: “The shortages are now impacting our commercial PC and premium consumer PC Q4 forecasted shipments”
Intel has failed to keep pace with customer demand since late 2018 and there is no clear end in sight to the issue. Intel says it is ramping up investment and turning to foundries to help speed up production.
Intel last week published an open letter of apology for the shortages, saying “we appreciate [this] is creating significant challenges for your business… supply-demand balance remains a challenge.
Pressed on whether there were “more competitive alternatives” (a nod to AMD) by a Goldman analyst and why the shortages were so protracted, HP President and CEO Enrique Lores said: “We have been in this situation for about a year now and as I said before, we expect it to continue for probably at least two other quarters. I think the question about the ‘why’ is probably a better question to ask to Intel than to us…”
He added: “What I can tell you though is that we continue to be committed to use multiple CPU providers. We are working with other vendors, we have been growing the mix for the other category. But Intel is still a very large part of our portfolio and therefore there are shortages. We need to navigate through those and manage our business that way.”
HP Earnings: Slump Continues
The comments came as HP’s slump continued, with the company reporting print revenue of $5 billion, down six percent, as commercial hardware revenue fell two percent and consumer hardware revenue fell 10 percent.
(The company is continuing with a restructuring (in the face of a hostile takeover bid by rival Xerox) and on November 1st, went live with new operating model and the creation of a single commercial organisation. HP has also stripped out the regional layer of its organisation, with 1,000 employees opting in to a voluntary early retirement program in the US.)
Lores said: “We now expect industry-wide CPU supply constraints to persist through the first half of 2020. In Q1 specifically, we’re anticipating a larger revenue impact than in Q4, however, we expect our mix to shift to more profitable units which should largely mitigate the profit impact.”
(CFO Steve Fieler added: “This is more of a revenue impact than profit impact for the quarter as we expect our mix should be better.”)
Dell Frustration Shows
Dell was arguably blunter: “Intel CPU shortages have worsened quarter-over-quarter. The shortages are now impacting our commercial PC and premium consumer PC Q4 forecasted shipments” vice chairman Jeffrey Clarke said, trimming its outlook and blaming Intel for the fall in results.
Dell cuts its revenue forecast for the full year to a range of $91.8 billion to $92.5 billion, down from a range of $93 billion to $94 billion.
Experts suggest rival AMD is unable to make up the shortfall anytime soon, and OEMs remain sceptical of consumer demand for its chips. Amazon (US)’s bestseller list of CPUs tells a different story: eight out of the top ten processors listed are AMD, with only a pair of Intel offerings present (as first spotted by Wccftech. The top chip is AMD’s Ryzen 7 2700X).
UK figures are similar: four of the five bestselling CPUs are AMD’s, with the AMD Ryzen 5 3600 Processor and AMD Ryzen 7 3700X Processor in first and second place respectively. Intel’s Core i7 9700K takes bronze.