Intel to face heat if HP spins off PC biz

BANGALORE, INDIA: Intel Corp's PC business will face greater pricing pressure following Hewlett-Packard Co's decision to spin off its personal computers business, Nomura said and added that it expects the top chipmaker to miss its third-quarter guidance.

On Thursday, HP said it may spin off its PC business — the world's largest — as part of a wrenching series of moves away from the consumer market, including killing its new tablet and buying British software company Autonomy Corp for as much as $11.7 billion.

Intel's PC Client group — which caters to personal computers — accounted for 64 per cent of the chipmaker's sales last quarter, the brokerage said. It maintained its "reduce" rating on the stock and a price target of $18.

Nomura said HP's lowered outlook for the second half of 2011, consistent with Dell Inc and NetApp Inc's weak forecasts, backs its view that Intel will miss its third-quarter outlook.

Last month, Intel forecast third-quarter revenue of about $14 billion, give or take $500 million.