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Chip shortages may wipe out holiday PC sales, Intel warns

Image: pureinfotech

For cheap PCs, hordes of customers flock to Black Friday and other holiday discounts. Intel warned on Thursday that there could not be many deals this year.

On Thursday, Intel released its third-quarter earnings, with mixed results: Profits and revenue both increased, while the company forecasted flat revenue coming into the fourth quarter, which is known for its strong end-of-year sales.

This was partly owing to a continuous global chip shortage, which made it difficult for PC manufacturers to ship machines using Intel chips.

This, in turn, will have repercussions. PC manufacturers will have to shift as well, focusing on gadgets where they can make the most money: high-end, expensive PCs.

Intel chief financial officer George Davis stated that sales in its PC components division, known as the Client Computing Group, is expected to be flat in the fourth quarter due to PC makers passing over entry-level computers.

“…Strong demand for our higher-end products, bolstered by Alder Lake’s launch, has been offset by weaker OEM demand for lower-end products, as Oem prioritise their limited component supply to support higher-end system sales.”

Intel also stated that its 12th-generation Alder Lake processor would be publicly presented at the Intel Innovation virtual conference next week, after the company revealed the chip’s architecture earlier this year.

Alder Lake will be Intel’s first “performance hybrid” processor, building on the company’s previous Lakefield architecture with a chip that is optimised for performance rather than battery life. Other, more expensive components will surround Alder Lake, including the launch of cutting-edge DDR5 memory.

While the PC market in the United States is slowing, it is still increasing – by roughly 3.9 percent compared to a year ago, according to IDC . Due to component shortages, supply continues to outpace demand.

TV prices are at their highest position in at least a decade, according to retail industry tracker NPD, with TV average selling prices increasing. That means you’ll have to spend more for cheap TVs than in the past.

PC sales appear to be on track to follow suit. According to NPD analyst Stephen Baker, “entry-level products across [consumer electronics] may be difficult to come by this holiday season due to component shortages.” “This will encourage users to upgrade to more feature-rich, higher-priced items in order to acquire what they want.”

Peripherals will instead become gifts, according to Baker, as consumers opt for less expensive goods like mice and cameras.

According to Intel’s Davis, the chipmaker is already seeing some of the initial repercussions of this trend, with commercial, desktop PCs, and higher-end consumer notebooks experiencing the most sales. According to him, demand was weaker in the lower-end consumer category and in the education industry.

Intel CEO Pat Gelsinger spent much of Thursday’s investor call trying to persuade Wall Street that short-term investments and lower margins will pay off in the long run as the company strives to recover manufacturing leadership by rushing through five production process nodes in four years.

Pat Gelsinger, Intel’s CEO, has stated that he expects the “supply ecology” in the PC market to improve progressively till 2022.

This simply means that you’ll have to shop wisely on Black Friday. Because “Black Friday” spans months rather than days or weeks, we’ve already established that you’ll have to pick and select your Black Friday discounts. This year, shopping will not be a one-day or two-day event, but rather a state of mind.



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