- Associated Press - Wednesday, July 20, 2011

SAN FRANCISCO (AP) - The changing face of the computer industry was on display Wednesday as two companies representing the old guard and the new issued strong results for the latest quarter.

Intel, a bedrock of the PC business, and Qualcomm, a vanguard in mobile computing, showed how companies at opposite ends of the computing spectrum are adapting to a market that’s in intense upheaval.

The U.S. and European PC markets have slumped: Fewer people are buying new PCs because of economic anxiety, market saturation and the rise of seductive new gadgets such as Apple’s iPad.

So Intel, which helped create the PC industry three decades ago, is counting on other areas for growth.

The world’s No. 1 maker of PC processors benefited from healthy demand from corporations and in emerging markets. It also rode the popularity of smartphones and tablet computers by selling the chips powering additional servers needed to handle the increased mobile traffic.

CEO Paul Otellini said the results left him with “increasing confidence” for the second half of the year.

Intel’s smaller rival, Advanced Micro Devices Inc., reports results on Thursday.

Intel said Wednesday that its net income rose 2 percent to $2.95 billion as revenue jumped 21 percent to $13 billion.

Meanwhile, Qualcomm’s net income increased 35 percent to $1.04 billion, and revenue rose 34 percent to $3.62 billion. The maker of wireless chips credited robust smartphone adoption. The company raised its guidance.

Taken together, Intel’s and Qualcomm’s numbers demonstrate two things:

_ The rise of mobile gadgets and weakness in the consumer PC market in U.S. and Europe have profoundly transformed Intel’s business.

_ Those changes are benefiting companies such as Qualcomm as they assume a more prominent role in the semiconductor world.

But investors’ dismissive reaction to the reports underlined that the companies are still subject to different sets of expectations, even as their businesses overlap to a greater degree.

After the results came out late Wednesday, Intel Corp.’s stock fell 34 cents, or 1.5 percent, to $22.62, apparently because of fears that the PC market is so wobbly that Intel’s forecasts might be too high.

Qualcomm Inc.’s stock fell $1.50, or 2.6 percent, to $55.77 as some investors expected even stronger results.

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