flutterbys in my tummy

big "rebates" for dell is my guess

Jeez morewind , if this new high end business is so wonderful, how come a $40 million revenue decline in the mobile division decreased operating earnings in that same division by $400 million? Ouch!

When I think about all the institutional ownership of Intel stock, a particular buffett quote comes to mind

normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities - that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future - will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands."

Apple Computer so far hasn't been a boon to Intel. The chipmaker, ranked fifth in the U.S. but not in the top five worldwide, saw its U.S. market share decline from 3.6 percent to 3.5 percent. Apple's worldwide share is around 2.3 percent.

http://news.com.com/PC+shipments+up%2C+but+Dell+loses+ground/2100-1003_3-6062973.html

22% Rev growth YOY in mobile = a massive 2% increase in opp earnings. That is NOT good.

Intel's liquidity ratios are now actually weaker than AMD's.

CR is 1.83 vs 2.16 for AMD
QR is 1.47 vs 1.99 for AMD

Something doesn't smell right here. IF AMD is going to double their capacity in the next six months, if everything is so rosy, why contract with Chartered?

That is something Intel shareholders should be very concerned about. AMD can make an astounding profit on $90-$100 ASPs; Intel can not. AMD now has the capacity in place to go after the fat part of the market and if they are content with $100 ASPs, they are going to get a pig piece of it. I particularly enjoyed Hectors comment in the last CC about Intel and AMD ASPs converging:

It is important to highlight that as we put pressure on the market, so that there is perhaps an operation of ASPs converging, I think the only people, the people that win are the customers, and the end user. And I think that will be healthy. I think healthy for everybody. Certainly healthy for us for sure.

Jeez Tecate, maybe you should buy the report. I don't think my friends at CS would appreciate me giving away all their hard work for free.....

WTF are you talking about by who?

from my Credit Suisse report:

Mobile Share Gain for AMD in Europe Better than Expected. The
most striking turn of events in the PC supply-chain in recent weeks has
been that AMD is taking meaningful share in mobile CPUs with Acer
and HPQ in Europe. This suggests Intel’s Centrino Juggernaut might
be penetrable earlier than expected and could lead to both increased
market-share and higher ASPs (see full note for sensitivity) for AMD.

12 months ago AMD had almost zero presence in the mobile sector. now they have almost 40% of the the US retail market (that market makes up 9% of global pc sales by the way). Your inability/unwillingness to accept the significance of this doesn't make it any less so.

AMD is scrambling to respond to Centrino, but they won't ever catch up. Even Turdion's logo resembles Centrino. Now that's what I call the sincerest form of flattery ...

In sales at retail stores, AMD surpassed Intel overall by 58 to 41 percent for the first 11 weeks of 2006, according to the latest research by NPD group provided to internetnews.com. Intel actually leads in notebook sales 61 to 38 percent, but AMD more than flips the equation on the desktop side with a 78 to 21 percent edge.

http://www.internetnews.com/ent-news/article.php/3595946



Funny, I seem to remember stats for the first 7 weeks of the year showing Intel with 63% of the US retail notebook market:

In notebooks, Intel's share has declined to 63 percent, even though Baker and others generally agree that Intel enjoys a technological advantage in laptops.

http://news.com.com/Strike+three+for+Intel/2100-1014_3-6045843.html

this is the place they have lost big to AMD? What about the high end; mid range and budget server space? or the high end DT space? or the mobile space? AMD's attack on these areas is clearly taking its toll on INTC's ability to stay dry under their formally cozy monopoly price umbrella. If you don't think AMD management saw this coming from a mile away and re-allocated capacity (as per Hectors comments during the last CC) to higher margin product.....

Part One Hubble, bubble, AMD and trouble

By Charlie Demerjian: Monday 03 April 2006, 08:27
INTEL IS IN DEEP trouble, and it doesn't seem to be capable of grasping what needs to be done to fix the problem.

That problem is AMD, and the vast chunks of market share it is gouging out of some of Intel's formerly most profitable areas. Intel keeps striking back, or attempting to, but in a shockingly ineffectual and reactionary manner, but nothing seems to work because it is aiming at the wrong target. Management doesn't, or more likely refuses to understand what needs to be done.

Intel is now in the midst of a round of hush-hush price cuts. The most recent was a spur of the moment 10% kickback to distributors that made their numbers this quarter, US only.

The problem was it was late, many didn't get it in time to act, and it targeted the wrong components. Since it was a US initiative only, it had the bonus effect of irritating European, Asian and other customers.

Intel is also aiming at the low end of the market, and word has it that it is targeting AMD with a low end price war, taking Celerons from a $50 part to a $40 part, and soon to be a $35 part. This was always effective against AMD in the past, so why not now? However, AMD isn't in that space anymore but it is eating the Intel high end, not the low. The net effect of this plan is Intel is cutting margins on its volume lines seemingly without any effect on its target.

Now, why would Intel cut prices and force distributors to move product out the door as fast as they can? The answer is market share. This is a classic example of a company eating its own future. It is moving chips out the door through every means possible and basically flooding the market so it doesn't have to announce huge marketshare drops at the next quarterly conference call.

Inventory Buildup
Intel has to avoid an inventory build up that many see as inevitable, so it is shoving Celerons out the door as fast as it can. It can't make the same cuts to Pentium 4s or Pentium Ms because that would destroy its margins in a way that would require explaining to Wall Street.

The problem is that AMD was sold out for Q4, and has been on allocation for Q1 since long before Q1. That position has eased in Q2, but there are still supply problems. AMD has a shortage of millions of microprocessors and that is not easing.

So, with Intel management running around wondering what to do, rearranging deck chairs on the Itanic, we believe it is pulling out the play books of old and missing its targets. It has to keep margins up, it has to keep marketshare numbers up, and has to do it in a way that makes it look good.

Look for AMD to take another huge chunk of Intel's market during the next quarterly conference call, and things to get worse after that. Q2 will not improve the situation, Intel can start a price war, but that would only disproportionately hurt them. AMD is now the leader in server class parts, and is raising prices because people will pay a premium for Opterons. Any pricing games will most likely be shrugged off because if you need low power/high performance parts, your choice is AMD. Any price war might ease the shortage of AMD parts, but only a devastating war would burn all the way through it.

Woodcrest and AMD's K8L
What about the saviour chip, Woodcrest? Using Intel's own numbers, it expects the next gen architecture to ramp to 20% of sales by the end of the year. These numbers traditionally are for the last day of the quarter, so with New Year's Eve being the best case scenario, 80% of Intel's market is still vulnerable to AMD. It is telling customers like Dell that by mid-2007 it will be able to deliver about 60% new cores, so the bleeding won't end quickly.

With AMD resurgent, and K8L coming to close any gap with Intel on power, the lessened bleeding has a good chance of being a very short lived phenomenon. AMD will likely hold on to any gains they make for a long time.

Over the last two or three years, the Intel roadmap has been ripped up time and time again, and each time a reactionary stopgap is put into place. Craig Barrett's "we screwed up, but we will fix it" speech on the Pentium 4 not making 4GHz seems to have fallen on deaf ears. Each new plan has been torn up time and time again, but now it's learned something because Intel has not talked publicly about the problems.

There are multiple problems that need addressing, and few if any seem to be getting the needed attention. Intel needs to stop reacting and come up with a comprehensive technical plan, throw out distractions, and replace management with a new team that listens to the engineers.

The reason that AMD is walking all over Intel is not because of the chips it has, it is because of the platform. Not platform in the "shiny happy people" Intel marketing sense, but in a coherent, cohesive technical manner. AMD built a strong infrastructure and put a strong chip on it. It has a complete system approach that works together, and gets the right job done for the right reason.

AMD does lag in some areas but more than makes up for that in others. People don't buy a single benchmark result, they buy a computer. AMD in effect has the computer, Intel doesn't. When AMD slaps Intel silly with a result, performance watt being the marker right now, Intel comes out with a number or three to point out that its upcoming parts will bring them back into the game.

Intel needs a Hypertransport
The problem is that it aims at a specific target in the system, making the CPU better, or the FSB better and doesn't look at the whole. When AMD was not a credible player, checkbox marketing would have worked, but AMD has achieved Intel's worst nightmare, 'street cred'. Buyers now look past the checkboxes and evaluate things on a comprehensive and fair basis.

Until Intel comes out with a coherent whole, basically a Hypertransport ecosystem for Intel parts, it will continue to have problems. It has cancelled at least half a dozen projects including CSI, its version of Hypertransport, in the last few years. From the ill-conceived Whitefield disaster to the mediocrity inducing common platform, such attempts have been clouded by mismanagement and poor decision making.

The great white hope is due in the fourth quarter of 2008, and it is called Nehalem. Until then, Intel is in Whack-A-Mole mode, and it will keep bleeding. Barring another failure to execute, it will put them where AMD is now in terms of platforms, unless AMD pulls something else out of the hat. Woodcrest may be a great core, but if you plug it into a garbage platform, it is a shining spot on a pile of garbage. µ

Part One Hubble, bubble, AMD and trouble

By Charlie Demerjian: Monday 03 April 2006, 08:27
INTEL IS IN DEEP trouble, and it doesn't seem to be capable of grasping what needs to be done to fix the problem.

That problem is AMD, and the vast chunks of market share it is gouging out of some of Intel's formerly most profitable areas. Intel keeps striking back, or attempting to, but in a shockingly ineffectual and reactionary manner, but nothing seems to work because it is aiming at the wrong target. Management doesn't, or more likely refuses to understand what needs to be done.

Intel is now in the midst of a round of hush-hush price cuts. The most recent was a spur of the moment 10% kickback to distributors that made their numbers this quarter, US only.

The problem was it was late, many didn't get it in time to act, and it targeted the wrong components. Since it was a US initiative only, it had the bonus effect of irritating European, Asian and other customers.

Intel is also aiming at the low end of the market, and word has it that it is targeting AMD with a low end price war, taking Celerons from a $50 part to a $40 part, and soon to be a $35 part. This was always effective against AMD in the past, so why not now? However, AMD isn't in that space anymore but it is eating the Intel high end, not the low. The net effect of this plan is Intel is cutting margins on its volume lines seemingly without any effect on its target.

Now, why would Intel cut prices and force distributors to move product out the door as fast as they can? The answer is market share. This is a classic example of a company eating its own future. It is moving chips out the door through every means possible and basically flooding the market so it doesn't have to announce huge marketshare drops at the next quarterly conference call.

Inventory Buildup
Intel has to avoid an inventory build up that many see as inevitable, so it is shoving Celerons out the door as fast as it can. It can't make the same cuts to Pentium 4s or Pentium Ms because that would destroy its margins in a way that would require explaining to Wall Street.

The problem is that AMD was sold out for Q4, and has been on allocation for Q1 since long before Q1. That position has eased in Q2, but there are still supply problems. AMD has a shortage of millions of microprocessors and that is not easing.

So, with Intel management running around wondering what to do, rearranging deck chairs on the Itanic, we believe it is pulling out the play books of old and missing its targets. It has to keep margins up, it has to keep marketshare numbers up, and has to do it in a way that makes it look good.

Look for AMD to take another huge chunk of Intel's market during the next quarterly conference call, and things to get worse after that. Q2 will not improve the situation, Intel can start a price war, but that would only disproportionately hurt them. AMD is now the leader in server class parts, and is raising prices because people will pay a premium for Opterons. Any pricing games will most likely be shrugged off because if you need low power/high performance parts, your choice is AMD. Any price war might ease the shortage of AMD parts, but only a devastating war would burn all the way through it.

Woodcrest and AMD's K8L
What about the saviour chip, Woodcrest? Using Intel's own numbers, it expects the next gen architecture to ramp to 20% of sales by the end of the year. These numbers traditionally are for the last day of the quarter, so with New Year's Eve being the best case scenario, 80% of Intel's market is still vulnerable to AMD. It is telling customers like Dell that by mid-2007 it will be able to deliver about 60% new cores, so the bleeding won't end quickly.

With AMD resurgent, and K8L coming to close any gap with Intel on power, the lessened bleeding has a good chance of being a very short lived phenomenon. AMD will likely hold on to any gains they make for a long time.

Over the last two or three years, the Intel roadmap has been ripped up time and time again, and each time a reactionary stopgap is put into place. Craig Barrett's "we screwed up, but we will fix it" speech on the Pentium 4 not making 4GHz seems to have fallen on deaf ears. Each new plan has been torn up time and time again, but now it's learned something because Intel has not talked publicly about the problems.

There are multiple problems that need addressing, and few if any seem to be getting the needed attention. Intel needs to stop reacting and come up with a comprehensive technical plan, throw out distractions, and replace management with a new team that listens to the engineers.

The reason that AMD is walking all over Intel is not because of the chips it has, it is because of the platform. Not platform in the "shiny happy people" Intel marketing sense, but in a coherent, cohesive technical manner. AMD built a strong infrastructure and put a strong chip on it. It has a complete system approach that works together, and gets the right job done for the right reason.

AMD does lag in some areas but more than makes up for that in others. People don't buy a single benchmark result, they buy a computer. AMD in effect has the computer, Intel doesn't. When AMD slaps Intel silly with a result, performance watt being the marker right now, Intel comes out with a number or three to point out that its upcoming parts will bring them back into the game.

Intel needs a Hypertransport
The problem is that it aims at a specific target in the system, making the CPU better, or the FSB better and doesn't look at the whole. When AMD was not a credible player, checkbox marketing would have worked, but AMD has achieved Intel's worst nightmare, 'street cred'. Buyers now look past the checkboxes and evaluate things on a comprehensive and fair basis.

Until Intel comes out with a coherent whole, basically a Hypertransport ecosystem for Intel parts, it will continue to have problems. It has cancelled at least half a dozen projects including CSI, its version of Hypertransport, in the last few years. From the ill-conceived Whitefield disaster to the mediocrity inducing common platform, such attempts have been clouded by mismanagement and poor decision making.

The great white hope is due in the fourth quarter of 2008, and it is called Nehalem. Until then, Intel is in Whack-A-Mole mode, and it will keep bleeding. Barring another failure to execute, it will put them where AMD is now in terms of platforms, unless AMD pulls something else out of the hat. Woodcrest may be a great core, but if you plug it into a garbage platform, it is a shining spot on a pile of garbage. µ

I was told that a new AMD quad-core-based system was in the works and that it would require its own substation and dedicated liquid cooling system. I had no idea it was this big.

Seems like a substantial commitment to make. IYO, would that sort of commitment be extended without thorough evaluation of the hardware? Do they take Cray's word that they'll be able to deliver the system at the stated specs? Certainly Cray would have samples from AMD prior to making these claims, wouldn't they?

TIA

Keith!! Welcome back - I thought you were gone for good.

CD or anyone else for that matter. Do you remember that article/blog where the writer tried to get the HP employees to explain why the centrino sticker cost $50? He demonstrated that one could configure a laptop with the same specs (on their site) and it cost $50 less. If anyone has a link, it'd be much appreciated.

Gee, it sure is tough to get a real read on Intel's situation with the conflicting information hitting the wire today. Hmmm, who to believe.......a former baseball player turned options strategist (keeping in mind his rather brilliant call on Dell in the money calls just prior to them soiling the sheets for the third straight time)........or one of the few analysts that has been consistently right on the AMD/Intel story over the last 3 years????????

Does the idea of Lenny Dykstra giving investment advice scare the beejesus out of anyone else? Did anyone see him on CNBC a month or so ago? Christ, he made George Bush sound brilliant.

64 bits is a DIFFERENTIATOR - a salesperson's best friend. Informed buyers will always opt for more value at the same pricepoint......

Google struggles with AMD problems

Or AMD struggles with Google problems

By Charlie Demerjian: Sunday 19 March 2006, 08:01
ALL MAY NOT BE WELL with the Google AMD marriage. This weekend the Big G started a rollout of a heap of AMD based boxes based on the Nvidia nForce Pro 2200.

The problem is that the software is not all there yet, described by one insider as 'not ready for production' and 'chock full of bugs'. The time for fixes is supposedly now past, and the rollout will now begin.

So, if things start slowing down at Google, or better yet, you do a search for 'Easter decorations' and get a return for 'Atrocities in sub-Saharan Africa', you know why. In reality, you will probably never see any of the problems this may cause, but that doesn't mean that Google employees won't lose a lot of hair over this. µ

don't you think those US retail numbers for the first 7 weeks of 2006 and Intel's already bloated channel inventory at the end of Q4 indicate that things may be different this time around?

rahul has spoke about conroe vs fx60

http://voodoopc.blogspot.com/

4:42PM Semtech beats by $0.01, guides Q1 above consensus (SMTC) 19.52 +0.10 : Reports Q4 (Jan) earnings of $0.18 per share, $0.01 better than the Reuters Estimates consensus of $0.17; revenues rose 10.2% year/year to $64.4 mln vs the $64.2 mln consensus. Co issues upside guidance for Q1, sees EPS of $0.18-0.19, ex-items vs. $0.17 consensus; sees Q1 revs of $65.0-66.3 mln vs. $64.51 mln consensus. Co says "While the first half of the year is typically impacted by seasonal trends in consumer products, the healthy semiconductor industry conditions and a broadening of the Company's end-markets are encouraging."

FWIW Komag just revised guidance to the high end of previous range (they make media for hard drives).

Not to mention the US retail data released on friday

did you happen to see this info:

AMD's surge can be seen most strongly in the U.S. retail market, which accounts for about 9 percent of global PC shipments. In the first seven weeks of 2006, AMD's share in desktops in that area climbed to 81.5 percent, while Intel's has slid to 18.5 percent, Baker said. That's almost a complete reversal of their typical relative positions.

In notebooks, Intel's share has declined to 63 percent, even though Baker and others generally agree that Intel enjoys a technological advantage in laptops.

The retail PC market itself is holding steady, Baker noted. "Overall volume is OK through the first six to eight weeks of the year. We're still growing in double digits in notebooks and single digits in desktops," he said.

http://news.zdnet.com/2100-9584_22-6045843.html


Price plays a key factor. In recent weeks, the average AMD desktop sold in American outlets for $578, Baker said. The average Intel desktop cost $780. In notebooks with Intel chips, the average price was $957, lower than AMD's $1,016.

The big problem with the airlines, which certainly doesn't apply in the AMD/Intel situation, is there are relatively few barriers to entry but seemingly endless barriers to exit.

As for the coming price war which has to happen, I see Intel faring better than AMD. Recall the terrible early 2000's.

smooth, the price war has been going on for a long time now. The problem with your theory is Intel no longer has the luxury of monopoly pricing in any segment.....period. The business model that got them fat and happy is broken and their competitior is leaner, meaner and more capable then ever - for the first time since they were handed the x86 business on a silver platter they actually have real competition to deal with.

Isn´t that rather 37%? Interesting part about the notebook ASPs that seems counterintuitive when you look at what´s available. Desktop as one would expect (ASP difference).

You just know HP is loving that.

Also important: U.S. retail market, which accounts for about 9 percent of global PC shipments.

still very significant IMO, as it indicates consumer sentiment when they are given a choice between AMD/Intel based systems. My order for $20 Dell puts expiring in 2007 didn't fill today :(

I wonder what Charlie is going to be writing about tomorrow???? QC opteron? on what process? thoughts????

http://www.aceshardware.com/forums/read_post.jsp?id=115156304&forumid=1

PALO ALTO, Calif. -- Hewlett-Packard Co. (HPQ) doesn't have excess notebook computer inventory in its distribution channels, Chief Executive Mark Hurd said Monday.

Speaking at the Goldman Sachs Technology Investment Symposium, Hurd said he was unaware of any unusual order cancellations in its personal computer business. Rumors circulating among investors suggested the company had canceled large orders at the same time channel inventories rose.

Addressing the claims, Hurd said, "We don't have any excess channel inventory. I don't know what more to say about it."

He said H-P cancels orders every 20 minutes or so in the course of business. He said he knew of no out-of-the-ordinary order cancellation.

H-P CEO Hurd said at the Goldman Sachs symposium that he believes H-P can trim spending even while investing for growth.

"We will never stop taking cost out," he said. "I believe the company can both save money and grow at the same time."

Hurd added he expects H-P to continue making acquisitions. "We'll continue to be somewhat acquisitive," he said during his appearance at the Phoenix event, which was Webcast. "But don't expect the company to make "double-digit billion-dollar" deals, he said.

In discussing H-P's server business, Hurd said he believes the company is beginning to experience an advantage over Dell Inc. (DELL) by selling separate lines of servers running chips from Intel Corp. (INTC) and Advanced Micro Devices Inc. (AMD). Dell only sells machines with Intel chips.

H-P is gaining "some traction" because of its dual supplier strategy, he said. This is especially true in industries that call for computing power and low heat, he said, such as the Internet search industry.

"We give customers choice, (and) we have choice," Hurd said. "We plan to continue down that path."

-By Mark Boslet, Dow Jones Newswires; 650-496-1366; mark.boslet@dowjones.com

AMD IS NOT going to sit still in the face of Conroe and Woodcrest, but it will take them until the first half of 2007 to mount a comeback.

We have referred to the new chip as K8L, but it looks like there are several variants that will come out in 2007.

AMD has been talking up specialised laptop chips, and other things that seem to differ more from each other than the current Turion/A64/Opteron mix.

The first of these that we have heard about is the server variant, and it will be a killer. It has 2x the floating point units, and sources tell us that it will push about 1.5x the floating point performance of the current chips in the real world.

Woodcrest is going to be an Int monster, but slightly weaker on the FP side. This chip, be it K8L or a new code name, should blow Woody out of the FP waters. µ

http://www.theinquirer.net/?article=29890

VIIV IS STUPID and broken, a platform that will not only not live up to its promise, but will actively make your experience worse. If I had to design a way to make consumers hate a product, it would be hard to do a better job, I don't think Intel has quite come to terms with the enmity these doorstops will cause.

http://www.theinquirer.net/?article=29849

Dell is the only major server vendor to go exclusively Intel in its x86 line. Can you remind me again how they did in 2005?

http://finance.yahoo.com/q/bc?t=1y&s=DELL&l=on&z=m&q=l&c=sunw

Dell will suffer greatly from Intel loosing thier grasp on monopoly pricing; their balance sheet is already starting to show the cracks. Let me guess, you're long Dell as well?

perhaps you'd like to answer the question? If Intel only isn't responsible for stock decline....shitty earnings results....shrinking margins....... what is?

you're kidding right? Please tell me you're high...and feeling like quite the comedian.

http://finance.yahoo.com/q/bc?t=1y&s=DELL&l=on&z=m&q=l&c=hpq

Are you saying Dell's "intel only" policy isn't the reason for the decline in their stock price?

shorting and buying leap puts aren't the same thing. Actual shorting is a fools game, the maths just don't add up - best case scenario you get your bet back, worst case scenario your broker has to close you out......equity bye bye-oh. LEAP puts make sense in a few cases...just not AMD ;) Dell leap puts, now those could be iteresting....so could XMSR....SIRI....KFX....INTC ;)

Shorting is a fools game - anyone with a grasp of simple maths should be able to grasp why.