Posted on 02/23/2004 8:18:08 PM PST by maui_hawaii
Large computer makers and Asia are growing in importance to Intel's business, according to a filing with the Securities and Exchange Commission. Intel also disclosed that the Internal Revenue Service is examining its 2001 and 2002 tax returns. The chipmaker is audited this way every two years, according to an Intel representative. It is already in dispute with the IRS over tax credits taken for 1999 and 2000 that could cost it $600 million.
In the annual 10K filing, the Santa Clara, Calif.-based company reported that approximately 42 percent of its total revenue of $30.1 billion last year came from its three largest customers. The total compares with 38 percent in 2002 and 35 percent in 2001. Dell accounted for 19 percent of total sales, while Hewlett-Packard accounted for 15 percent. The third-biggest customer was not disclosed, and no other customer accounted for more than 10 percent.
Almost three quarters--72 percent--of Intel's sales for the year came from overseas: 40 percent, or $12.1 billion, from Asia; 23 percent, or $6.9 billion, from Europe; and 9 percent, or $2.7 billion, from Japan. The Americas accounted for 28 percent of revenue, or $8.4 billion--a slight decline from $8.6 billion the year before. Some of the chips sold in Asia, however, are put into PCs that are exported to the United States.
The revenue figures underscore trends that have been discussed several times by analysts and executives: the increased migration of manufacturing to Asia, the growth in emerging markets and the consolidation among PC makers.
Despite the revenue shift overseas and its increased hiring outside the United States, Intel remains predominantly a U.S. company in terms of employees and physical presence. Last year, 75 percent of its silicon was produced in U.S. plants, with the remaining 25 percent made in Israel and Ireland. Some 60 percent of its workers were based in the United States.
Typically, the vast majority of the costs of chipmaking revolve around buildings and equipment, so there is not a huge incentive to build plants in developing markets. (By contrast, test and packaging facilities, which are more heavily dependent on labor, are built in developing countries.)
Intel's filing highlights that it is still heavily reliant on the PC market. In 2003, some 87 percent of its revenue, or $26.1 billion, was brought in by the Intel Architecture Group, which makes microprocessors, motherboards and other parts for desktops, notebooks and servers. Of that group revenue, 73 percent was generated by microprocessors--which means that 64 percent of Intel's total income came from Pentium, Xeon and Itanium chips.
The Architecture Group's revenue grew by 17 percent last year, in contrast to the Intel Communications Group, which saw revenue rise by only 3 percent to $2.1 billion. The Wireless Communications and Computing Group, which has since been merged into the communications unit, reported a decline in income of 17 percent to $1.8 billion. Both communications divisions reported operating losses for 2003.
The SEC filing indicates how a change of chief executive might next occur at Intel. Craig Barrett, who turns 65 in August, will be required to step down as CEO (but not as a director) at the first shareholder meeting following that birthday. That meeting will likely occur in May 2005. Paul Otellini, Intel's president, is expected to take over as chief at that time. He will be around 55 at the time and will be required--like all other future Intel chiefs--to retire as CEO at 60, according to the filing and sources.
Some... how about a friggin LOT.
Dell accounted for 19 percent of total sales, while Hewlett-Packard accounted for 15 percent.
Interesting.
Report: U.S. PC Market Stages Comeback
January 15, 2004 (8:20 p.m. EST)
By Joseph F. Kovar, CRN
The U.S. PC market staged a recovery in 2003, with total shipments up nearly 11 percent over 2002, according to the latest edition of IDC's Worldwide Quarterly PC Tracker. IDC estimated total shipments for last year in the United States to be more than 52.7 million units, up 10.8 percent from the 47.6 million units shipped in 2002. IDC defines the PC market to include desktop PCs, notebook PCs and x86-based servers, but does not include handhelds.
Dell solidified its lead in the U.S. market by shipping 16.3 million units, or 30.9 percent of the entire market, according to IDC. This was up from 13.3 million units in 2002. No. 2 Hewlett-Packard also saw sales increases, but less dramatically, hitting 10.9 million units in 2003 compared with 9.3 million units in 2002.
Rounding out the top five U.S. vendors in 2003 were IBM, with 2.7 million units; Gateway, with 2.0 million units; and Apple, with 1.7 million units, IDC said.
Sales in the fourth quarter of 2003 provided a major boost for the entire year. IDC estimated that a total of 14.5 million units were shipped into the United States in the fourth quarter of 2003, up more than 15 percent from the 12.7 million units shipped in the same period last year. Dell took first place in the quarter with 4.4 million units, followed by HP, IBM, eMachines and Gateway.
Worldwide, HP regained the lead over Dell in the fourth quarter, shipping 7.5 million units compared with its rival's total of 7.2 million units, according to IDC. They were followed by IBM, Fujitsu and Fujitsu Siemens, and Toshiba to round out the top five.
HP's resurgence in the fourth quarter was not quite enough to give it bragging rights as the worldwide PC sales champ. Dell sold the most PCs in 2003, with shipments totaling 25.8 million units compared witho HP's 25 million units.
Worldwide, businesses and consumers bought 152.6 million PCs in 2003, up 11.4 percent from the 136.9 million they bought in 2002, IDC said.
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