Improved sales in processors and other products for servers helped boost results, with increased sales in Europe and North America. But Intel remained sheepish on their outlook for the early part of 2004, reserving any significant optimism for later in the year.
A bad stain on an otherwise outstanding quarter was a $611 million writedown from the Wireless Communications and Computing Group. A $1.6 billion acquisition of DSP Communications in 1999 -- which Intel had hoped would poise it as a key player in the mobile market and compliment their flash memory business -- went bust.
The spanking received in the wireless chipset sector shows just how tough it is to break new ground -- even for Intel. The company has struggled against rivals, such as Texas Instruments
To Intel's credit, the company realized that wireless computing applications -- rather than wireless communications platforms -- were much closer to its core processor business. Its bold move into connecting computing devices in 2003 with their WiFi-based Centrino line has paid off, with the products showing up in all major laptop brands and reportedly commanding healthy margins.
With the success of Centrino, Intel COO Paul Otellini is talking even bigger for 2004 -- recently outlining the company's plans to go after several sectors of the consumer electronics market. The company sees many opportunities to get Intel silicon inside many home electronic devices -- integrating televisions, PCs, and audio/video content into the digital abode of the future.
If Intel's record in the gaming space is any indication, the consumer electronics nut will be a tough one to crack. For certain, the next year will prove to be another key milestone for Intel's long-term growth prospects.
Dave Mock owns shares of Intel and digs the Blue Man Group. He is author of Tapping into Wireless, and welcomes your feedback at firstname.lastname@example.org.
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