Intel has released its latest financial report for the first quarter of 2014, with lower revenue and net income than last year.

The chip giant brought in a total of $12.8 billion (£7.6 billion, AU$13.6 billion) revenue for the first three months of the year, a decline of 8 per cent compared to the $13.8 billion (£8.2 billion, AU$14.7 billion) it earned in the first quarter of 2013.

Operating income came in at $2.5 billion (£1.5 billion, AU$2.7 billion), down 29 per cent. Net income was $1.9 billion (£1.1 billion, AU$2 billion), a drop of five per cent year-on-year.

The company's PC Client Group posted revenue of $7.9 billion (£4.7 billion, AU$8.4 billion), eight per cent down on the previous quarter and one per cent down on the previous year. The mild year-on-year decline suggests a stabilisation in this vital sector, which makes up the majority of Intel's revenue.

Ups and downs

Data Centre Group revenue was $3.1 billion (£1.8 billion, AU$3.3 billion), down five per cent sequentially, but up 11 per cent on 2013.

The mobile sector was one of the worst for Intel, with revenue of just $156 million (£93 million, AU$166 million) in its Mobile and Communications Group, a staggering drop of 52 per cent on the previous quarter and 61 per cent on the first quarter of last year.

The Internet of Things Group performed much better, with revenue of $482 million (£287 million, AU$514 million). This was a 10 per cent sequential drop, but a 32 per cent increase on 2013.

Likewise, Software and Services brought in $533 million (£317 million, AU$569 million), down 6 per cent sequentially and up 6 per cent year-on-year.

Budget focus

"In the first quarter we saw solid growth in the data center, signs of improvement in the PC business, and we shipped 5 million tablet processors, making strong progress on our goal of 40 million tablets for 2014," said Brian Krzanich, CEO of Intel.

The year ahead should see Intel focus on hybrid devices catering for the lower end of the market, adding to its existing push for Chromebook clamshell models.

"We're now expecting more than 70 two-in-one designs for the back-to-school selling season and many will be offered at $699 or less. These trends, in combination with renewed interest in Windows 8 from our customers, are encouraging," Krzanich said in his earnings call.

He also revealed plans for more than 130 Atom-based laptop and desktop designs for the affordable market.