Intel changed its Q4 forecast from 3 percent growth to a 12 percent slump, with profitability likewise down. Forrester CEO George Colony personally blogged three reasons not to worry:
1) Intel is not the bellwether that it once was. Personal computers and servers, the primary destination for Intel's processors, are not nearly as large a percentage of tech spending as they were back in 2001. 2) Layoffs in the economy have already begun. Fewer employees, fewer PCs needed. 3) Large companies are accelerating virtualization projects. Virtualization is a fancy word for running more applications on fewer servers. It is greener (less power), simpler (fewer servers to break), and cheaper. Good for companies looking to lower capital expenditure and operating expenses in a recession, but bad for Intel.