Intel slashed its revenue forecast for the first quarter by nearly $1 billion, citing lower-than-expected demand for business PCs and lower inventory levels across the PC supply chain. The company now expects first-quarter revenue to be $12.8 billion, plus or minus $300 million, compared to the previous expectation of $13.7 billion, plus or minus $500 million.

Intel said the change in revenue outlook is a result of weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain. The company believes the changes to demand and inventory patterns are caused by lower than expected Windows XP refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe.

On the other hand, Intel's data center business is meeting the company's expectations.

The company is forecasting the mid-point of the gross margin range to remain at 60 percent, plus or minus a couple of percentage points, as lower PC unit volume is offset by higher platform average selling prices. Expectations for R&D and MG&A spending and depreciation in the first quarter remain unchanged.

All other expectations have been withdrawn and will be updated with the company's first-quarter earnings report on April 14.

Worldwide PC shipments will fall further than forecast this year as the strong U.S. dollar and the lack of new products threaten sales, researcher IDC said today. Shipments will drop 4.9 percent in 2015 instead of the previous forecast for 3.3 percent decline, the research firm said in a statement.

Shipments won't pick up again until Microsoft and Intel roll out new products later in 2015, IDC added.