Three of the chip giant's four reported divisions reported flat sales compared to last quarter, but server chips sold like hotcakes with a 15% sequential jump. That's good for the product mix, since server processors tend to live on the high side of the price list, and average selling prices indeed enjoyed a small nudge.
The company doesn't necessarily expect the trend to last. Intel is working hard on mobile products, hoping to stake out some territory in tablets and smartphones before rival architectures from ARM Holdings
It would also be unreasonable to expect corporate spending to keep up this quarter's strength indefinitely. Catalysts such as testing of Microsoft Windows 7 systems and an aging corporate IT infrastructure will eventually run their course and drop that segment's results back to normal.
Nevertheless, Intel's management thinks big today. “2010 was the best year in Intel’s history," said CEO Paul Otellini. "We believe that 2011 will be even better." To make that happen, Intel is stepping up its capital investments in a big way, growing that cash-flow line item from $5.2 billion in 2010 to about $9 billion in 2011.
All told, fourth-quarter sales jumped by 8% year-over-year to $11.5 billion and non-GAAP earnings improved by 7% to $0.59 per share, both well ahead of Wall Street expectations.
The spending trends outlined by Intel's success point to good things for fellow enterprise-computing giants Cisco Systems
Did Intel hog market share in servers this quarter, or will AMD report strong data-center sales too? My crystal ball is a little cloudy today -- please discuss in the comments section below.
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