Supply chain indicates weak demand for PCs

Computer chip producer Intel has cut its revenue outlook for the third quarter based on weak demand for consumer PCs.

The company noticed that various elements of the consumer PC supply chain had indicated a drop in demand, likely based on consumers cutting back on luxury purchases in the downtrodden economy. Even the typical back-to-school computer rush doesn't seem to be buoying the market.

"Revenue is being affected by weaker than expected demand for consumer PCs in mature markets," Intel said. "Inventories across the supply chain appear to be in-line with the company's revised expectations."

According to a company statement, expected third quarter revenue is about $11 billion - down from previous estimates of $11.2 billion and $12 billion. Wall Street was expecting $11.52 billion with earnings of 53 cents per share, a figure not likely to be met.

Analysts had been expecting a downturn in the American PC supply chain for some time. Based on Asia's shaky PC supply chain and revised third quarter predictions for companies stateside, Wedbush analyst Patrick Wang said that the firm came away "incrementally more negative on the PC supply chain, in light of lowered 3Q forecasts for both Intel and AMD as well as an expectation for softer DRAM pricing and questionable demand."