Intel processing in tight market
Intel's size may help it weather a tough credit market, but it will still have a rough ride ahead with the entire tech sector. Janet Babin reports why the industry needs to prove its worthiness.
Intel logo behind CEO Paul Otellini (Justin Sullivan/Getty Images)
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Bill Radke: Intel releases earnings today and should meet expectations, but Janet Babin reports, the financial crisis will take its toll on the tech sector.
Janet Babin: Intel makes microprocessors -- the stuff that's inside your computer. When credit gets tight and profits dry up, so does demand for Intel's chips.
Analyst Andy Ng at Morningstar says corporations have already cut IT spending. He says Intel will have to get in line:
Andy Ng: They're gonna have to pair back expenses, and you know, just try to ride out the storm. You know, Intel has a solid balance sheet.
And with $38 billion in sales last year, its mammoth size will help Intel outcompete challengers like AMD.
But keeping customers won't be easy for any tech company. Analyst Carmi Levi says the entire tech sector will have to prove its worthiness:
Carmi Levi: Technology has to be seen not as a cost, but as a means of innovating, as a means of driving efficiency and cost savings.
There'll probably be fewer companies around to hear that marketing pitch. And fewer sales people to make it: thousands of tech employees have lost their jobs since 2006, and more cuts are expected next year.
I'm Janet Babin for Marketplace.
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