Intel 2012 Annual Report Download - page 40

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Net revenue for the DCG operating segment increased by $1.4 billion, or 17%, in 2011 compared to 2010. The increase in
revenue was due to a 12% increase in platform unit sales. Our server business benefited from growth in the number of
devices that compute and connect to the Internet, driving the build-out of the cloud infrastructure. Additionally, platform
average selling prices increased 3% due to an increased demand for higher-performance computing.
Operating income increased by $712 million in 2011 compared to 2010 as the gross margin increase of $1.2 billion was
partially offset by $487 million of higher operating expenses. The increase in gross margin was primarily due to higher
platform revenue.
Other Intel Architecture Operating Segments
The revenue and operating income (loss) for the other Intel architecture operating segments, including the Intelligent
Systems Group, Intel Mobile Communications, the Netbook Group, the Tablet Group, the Phone Group, and the Service
Provider Group for the three years ended December 29, 2012 were as follows:
(In Millions)
2012
2011
2010
Net revenue...............................................................
$ 4,378
$ 5,005
$ 3,055
Operating income (loss) ............................................
$ (1,377)
$ (577)
$ 270
Net revenue for the Other IA operating segments decreased by $627 million, or 13%, in 2012 compared to 2011. The
decrease was primarily due to lower IMC average selling prices and lower netbook platform volume. To a lesser extent,
lower netbook platform average selling prices contributed to the decrease. These decreases were partially offset by higher
ISG platform average selling prices.
Operating results for the Other IA operating segments decreased by $800 million from an operating loss of $577 million in
2011 to an operating loss of $1.4 billion in 2012. The decline in operating results was primarily due to lower netbook
revenue and higher operating expenses in the Other IA operating segments. Additionally, lower IMC revenue was largely
offset by lower IMC unit cost.
Net revenue for the Other IA operating segments increased by $2.0 billion, or 64%, in 2011 compared to 2010. The
increase was primarily due to IMC revenue, an operating segment formed from the acquisition of the WLS business of
Infineon in the first quarter of 2011. To a lesser extent, higher ISG platform unit sales also contributed to the increase.
These increases were partially offset by lower netbook platform unit sales.
Operating results for the Other IA operating segments decreased by $847 million from an operating income of $270
million in 2010 to an operating loss of $577 million in 2011. The decline in operating results was primarily due to higher
operating expenses within each of the Other IA operating segments, partially offset by higher revenue.
Software and Services Operating Segments
The revenue and operating income (loss) for the SSG operating segments, including McAfee, the Wind River Software
Group, and the Software and Services Group, for the three years ended December 29, 2012 were as follows:
(In Millions)
2012
2011
2010
Net revenue............................................................
$ 2,381
$ 1,870
$ 264
Operating income (loss) .........................................
$ (11)
$ (32)
$ (175)
Net revenue for the SSG operating segments increased by $511 million in 2012 compared to 2011. The increase was
primarily due to two months of incremental revenue from McAfee of $469 million. McAfee was acquired on February 28,
2011.
The operating loss for the SSG operating segments decreased by $21 million in 2012 compared to 2011. The decrease in
operating loss was primarily due to higher McAfee revenue, partially offset by higher McAfee operating expenses.
Net revenue for the SSG operating segments increased by $1.6 billion in 2011 compared to 2010. The increase was due
to revenue from McAfee, which was acquired on February 28, 2011. Due to the revaluation of McAfee’s historic deferred
revenue to fair value at the time of acquisition, we excluded $204 million of revenue that would have been reported in
2011 if McAfee’s deferred revenue had not been written down due to the acquisition.
The operating loss for the SSG operating segments decreased by $143 million in 2011 compared to 2010. The decrease
was due to higher revenue, partially offset by higher operating expenses across each of the SSG operating segments.
Due to the revaluation of McAfee’s historic deferred revenue to fair value at the time of acquisition, we excluded revenue
and associated costs that would have increased operating results by $190 million in 2011.