Intel said that it’s seeing weak demand for modems
While Intel (INTC) beat Wall Street’s bottom line estimates, it missed their top line estimates. This performance coupled with the company’s bleak guidance for 2019 caused its stock to fall nearly 7% in after-hours trading on January 24.
The company recently explained why it had missed its own fourth-quarter guidance. It cited weaker modem demand, a slowdown in China, and weakening demand for negative-AND, which is part of its nonvolatile memory solutions group. The nonvolatile memory solutions group saw a rise of 25% YoY (year-over-year) to $1.1 billion in the fourth quarter.
Intel is the only supplier of modems for Apple’s latest flagships
Intel is an exclusive supplier of modems for Apple’s (AAPL) iPhone XS, XS Max, and XR. Hence, Apple’s lackluster quarter may have affected Intel as well. Apple’s slowdown in both the iPhone and Mac spaces could continue to affect Intel. Apple currently uses Intel chips in its Macs.
To diversify its revenue, Intel has been increasing its focus on data-centric efforts in its upcoming 5G, IoT (Internet of Things), cloud, and AI technologies.
The chip maker’s revenue from its IoT group fell 7% YoY in the fourth quarter to $816 million. For the whole year, though, the company generated $3.5 billion, a rise of 9%.