What Does Intel’s Outlook Mean for PC Makers? (INTC, DELL, HPQ, AAPL, GOOG)

For the sixth straight quarter, Intel Corp. (NASDAQ: INTC) has posted record sales, partly due to a 22% increase in sales to PC makers. Does that indicate that the PC makers like Dell Inc. (NASDAQ: DELL) and Hewlett-Packard Co. (NYSE: HPQ) are revving up sales as well? Somebody is buyi
ng — and presumably selling — all those chips.

The outlook for PC sales growth has been modest to say the least. In the third quarter, Gartner said PC sales grew 3.2% year-over-year, considerably less than the 5.1% growth the group had anticipated. The weak spots were Europe, the Middle East, and Asia. Intel’s results were different. Emerging nations represented two of the company’s top three markets.

Server chip sales grew 15% from the same period a year ago, and the only dull spot for the company was in the fast-growing market of mobile devices. There, Apple Inc. (NASDAQ: AAPL) and smartphone makers like HTC Corp. and Samsung Electronics that use the Android operating system from Google Inc. (NASDAQ: GOOG) drove down sales of Intel’s Atom microprocessors by -32% year-over-year. The Atom chips are primarily used in netbook computers, a niche that has been demolished by smartphones and tablets.

China’s Lenovo has moved past Dell to be the number 2 PC company, trailing only HP. Acer is number 4 and Asus is number 5. The top five garnered 60% of PC sales in the third quarter, with Asus growing 18.5% year-over-year and Lenovo up more than 25%. Dell lost more than -1% and Acer dropped -23%, mainly because it needed to dump inventory.

If Acer’s inventory issues have been cleared up, then the upsurge in Intel sales could be an indicator that PC sales will rise in the current quarter. Dell’s problem is that it has been losing sales to businesses, and the company’s shipments in the US fell -7.2% in the quarter. Apple, which also uses Intel chips in its Macs and MacBooks saw a sales rise of 21.5% in the quarter. That bump is likely due to a halo effect from iPhone and iPad marketing and sales.