Intel's historically strong Data Center Group also fared well, with revenues up 19 percent to $3.5 billion, compared to a year ago. Overall unit sales climbed by 9 percent, while selling prices were up by 11 percent.
Krzanich and chief financial officer Stacy Smith said that their model assumed that the PC market would benefit from customers replacing older Windows XP machines at least through the end of the year. But Intel's smaller communications business, seen as a future growth path, lost a whopping $1.1 billion on revenue of just $51 million.
In part, that's because Intel continues to invest heavily in research to boost its fortunes. But Intel is way behind competitors in integrating LTE into its microprocessors, meaning that the company is being passed over by customers. Intel does have some stopgaps; for example, the emerging Chromebook market demands always-on connections, but isn't so picky about integrated chips, Krzanich noted.
"Clearly we don't go into business to lose money," Krzanich said. "We have some ground to make up."
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