Intel is also attempting to become a tougher competitor in the mobile chip business, which it has been unable to dominate the way it has desktop and laptop computers.

San Francisco - Intel on Thursday reported falling profits for the fourth quarter and full year 2012, and offered a disappointing outlook in another sign of the chip giant's woes from a shifting tech landscape.

The California tech titan said its profit in the fourth quarter fell 27 percent from a year earlier to $2.5 billion, resulting in a full-year profit down 15 percent at $11 billion.

Revenue for the quarter fell three percent to $13.5 billion and 1.2 percent for the full year to $53.3 billion.

Profits were slightly ahead of lowered expectations but highlighted the ongoing woes for Intel, which is the biggest maker of chips for personal computers but has been struggling amid a consumer shift to tablets and other mobile devices.

Global PC sales fell 3.5 percent in 2012, according to a recent report from Gartner, which said the quarterly pace of decline accelerated to 4.9 percent in the last quarter despite the launch of Windows 8.

Intel's shares fell some two percent in after-hours trade as the market reacted to a weaker-than-expected revenue outlook for the first quarter of 2013. The company projected revenues of around $12.7 billion, plus or minus $500 million.

“The fourth quarter played out largely as expected as we continued to execute through a challenging environment,” said Paul Otellini, Intel president and chief executive.

“We made tremendous progress across the business in 2012 as we entered the market for smartphones and tablets, worked with our partners to reinvent the PC, and drove continued innovation and growth in the data centre. As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing.” - Sapa-AFP