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and this
http://story.news.yahoo.com/news?tmpl=story&cid=581&e=1&u=/nm/20041005/tc_nm/column_plug...
Looks like the "PC in a closet" is fast reaching fruition. Talk about your killer app. The next few years are going to see a revolution in home entertainment and how we communicate wirelessly with each other.
Obviously this bodes very well for AMD. I hope that MSFT and AMD have something to say on this subject soon. All the pieces are falling into place.
I'm not convinced yet that sales will be less than q2. There was enough ambiguity in the posting I saw to leave some doubt. In any case it doesn't sound like the shortfall will be significant and the earnings/margin news is good.
Big money was moving the stock up after this mornings drop. These guys don't bet unless they know, so something is afoot. It may be something that affects INTC instead of AMD, but something is up.
back to even
Someone with big bucks knows something. Looks like the clueless got their asses kicked today.
Sure looks like something big is about to happen. Normally you would expect to see the stock taking a bath on this sort of news so something has changed big time.
Lucy, I'm home.
Boy are you guys verbose. There's no way I can read a months worth of messages. Anyone like to fill me in on what has transpired (big things) over the last month, other than AMD being up from when I left.
Concerning the bombshell. As usual things are far from clear. The significance of the update seems to revolve around whether AMD was talking about actual 2nd quarter revenue or the 3rd quarter revenue estimate, something not perfectly clear to me.
Anyway, the buyer who was collecting AMD when it was down 50+ cents seems to have known what he was doing. Selling seems to be drying up even as the SOXX vacillates.
OT: I probably won't be posting for the next month.
I'm going to be doing a version of the Tour de France(yes, on a bicycle).
The wife won't let me bring a laptop along so if I do post it will probably be from a cafe somewhere.
Actually, all the pieces seem to be in place, so I'm not too concerned about being out of the loop for that long. The only remaining question of significance is just how far into the Niceguy scale AMD is going to penetrate this quarter. Hopefully the macro market won't go to hell.
TaTa
http://www.eweek.com/article2/0,1759,1644477,00.asp
"Our architecture is not based on a bottleneck that's 20 years old that our competitor keeps holding on to," AMD's Williams said. "The AMD64 systems approach is … how do we optimize the core processor speed, the I/O, the memory latency, the communications functions—how do we make an optimized design."
Wrong, AMD knows how to use what IBM develops.
Like I said "Big Iron" has been around since the 360 days so it's not suprising that a lot of software has been written for it.
Again it's a matter of perspective and I happen to agree with Hector that "x86 everywhere" will eventually win out. Opterons will be no little part of that evolution, but it will take time. 10 years from now there will still be "Big Iron" machines but they will be a lot less important than today.
It is surprising the way IBM tends to be the first to recognize the value in something new, but then for some inexplicable reason fails to follow up. They do have a rather long history of being first and then failing to capitalize.
I assume you mean Noconas? Who would want to buy one given the mixed signals INTC is sending about the product? I think I understand why INTC got rid of the head of marketing. Imagine trying to sell Noconas.
What was that post about. I assume you ment condescending? What happened in the last 2 weeks?
Thanks for the post. I guess I'll have to get off IBM's case. Still, it took them long enough. Considering the response Sun and HPQ have had with Opterons I'm really surprised IBM didn't put forth more of an effort to capture market share.
Considering the efforts now going into creating whole lines of Opterons servers by the big OEMs next year should be a doozy.
Hate to jump in here, but your information about A64 and Opteron demand is dated by a couple of months. Everything I've been reading lately seems to indicate that AMD is having a hard time supplying the market demand for A64s.
I'm not sure why that is, but I suspect that the knob wasn't turned far enough to the right on 130nm production, and now A64 production is getting caught up in the 90nm conversion. I could be wrong, but that would be my best guess.
Yes, well my view is kind of from 1000 feet. Most of the techies are interested in what the bark bettle is doing to the Poderosa in the forest while my concerns are more along the lines of how well the forest as a whole is doing. Both voices are needed to get a thorough picture of things.
And then there's the INTC loggers that just want to clear cut the forest. Those are the ones that need watching because they have a very distorted view of what's important.
Well I'm not surprised by your comments, as I said it's perspective, and only time will prove who is correct.
I'll bet the buggy whip makers thought the same thing just before the automobile hit the market. Big Iron is a relic, a throw back to a previous age. The market just doesn't realize it yet.
As I've said before, there's a reason IBM hasn't embraced the Opterons more and it's because the Opterons are just too good at any price. Especially in the blade and small form factor machines where IBM has chosen to completely ignore the Opterons excellent heat and power values.
By this time next year INTC/DELL should be singing the blade blues as HPQ and SUNW clean up with Opteron processors in those markets. And that doesn't even include the tier2 guys who are having a field day with Opterons
I suppose it's largely a matter of perspective. Where do I begin?
How about Itanium. The Itanium is very much like the dinosaurs at the end of the Cretaceous period 60M years ago. While they represented the pinnacle of evolution at the time, alas they were destined for oblivion. Big Iron has been around since the IBM360 days and has had a nice life, but it's also about to be replaced by smaller more social animals that can talk to each other at very high speeds. What that means is that the future will belong to groups of small processors tied together with something like HT and grouped together with very high-speed switches.
From that point of view all the money spent on the Itaniums in a vain attempt to secure a proprietary marketing system since the early 90's has been a waste. Further, given that the efforts expended restricted INTC efforts at creating a truly competitive product, the whole project has been nothing but a colossal diversion of manpower and money into the toilet. But this is nothing new, INTCs whole outlook is based on creating proprietary products that can be milked rather than giving the market what it needs. But then in order to provide what the market needs INTC would have to get its hands dirty and really fight it out with others. This idea is anathema to INTC, the last thing they ever want to do is what's best for the user. And certainly they don't want to get their hands dirty.
Then there's the P4. Another marvel of proprietary ingenuity, and just what INTC marketing had in mind. After all everyone knows MHz sells. Or at least it used to. Another dinosaur destined for annihilation in the fireball. This time though it was the fireball of its own making. This beast ran so hot it wouldn't run with existing form factors so a whole new infrastructure had to be created to contain the beast. But marketing was happy because it got a solution no one else wanted to copy.
Then there's the Nocona. Having failed to create products that the enlightened consumer was willing to buy INTC did a hack job and hurried to market a product it billed as AMD64 compatible. Trouble is that after a couple of months none of those beasts can be found. And to make things worse INTC apparently has now lost faith in the product claiming that it really isn't the way it wants to go with 64bits. Talk about split personalities.
Undoubtedly you look at things differently than I do, but from my point of view everything INTC has done lately has turned to crap, and I doubt that's going to change anytime soon.
When I think of INTC I think of another Kingston Trio hit, "Charlie on the MTA". INTC seems to be stuck on a number of issues and like Charlie can't seem to get off of any of them.
What BS. You mean back in the days when AMD couldn't get anyone to produce MoBos because of fear of INTC. Have you forgotten about the white box MoBos with no identification of the supplier on them because the supplier was afraid of retaliation by INTC?
Well your right times have changed. Because of the way INTC has treated the chipset and MoBo guys I'm sure most would love the chance to spit on INTC's grave. The biggest change between then and now is the amount of support AMD now has from the hardware/software community. Heck the 939 chipset/mobos were out 6 to 9 months before the first chip from AMD even appeared. AMD is interested in pursuing a Win Win policy with its suppliers in contrast with the monopolistic, avaricious policies of INTC. AMD works with its suppliers and doesn't stab them in the back when it becomes convenient, something I'm sure the suppliers are well aware of.
One of the biggest problems INTC has is a lack of cross-fertilization due to everything being built in house. Current INTC policies are only going to cause more of the same. Besides that no one will work with INTC for fear that INTC will eat them alive. AMD on the other hand has no problems creating mutual benefit groups like the HT consortium. On top of it all INTC hasn’t had a single original idea, that was worth a damm, since the P3.
But probably the best way to show the difference between then and now is to look at how much support for AMD64 there is over IPF. I know your going to claim that 6 million code writers are busy writing Itanium compatible software, but it sure doesn't look that way to me. Even INTC is now admitting that Itanium progress has slowed since the announcement of EMT64. If anyone writes software for Itanium in the future you can bet it will only be after they have written the code for AMD64.
You right things have changed, INTC has become the pariah and AMD now wears the white hat within the support community.
It's really ironic what your asking. It wasn't that long ago that AMD backers were saying those sorts of things about the K7/K8 and the INTC acolytes were deriding the notion. Now suddenly the INTC backers are playing the "what if" games. My, my how things have changed. Face it AMD is the here and now. INTC may have a future but so far it looks like Mr. Andersons.
I'm not going to go back and look them up, but there have been a number of articles that have spoken of AMD gaining market share. Granted the amounts haven’t been that much, but for a small company like AMD that is accustomed to living on the edge the amounts are significant. This has been amply shown in the turn-around AMD has experienced over the last three-quarters.
More importantly is the shift in direction. In particular, the change in market position as the move to the k8's has raised the percentage of total market $ coming AMD's way. As Niceguy is forever want to remind INTC's $ growth in revenues has been significantly less than AMD's for some time. Further, AMD has gone from being a non-player in the server business to owning about 8% of the market. More importantly than the share gains have been the effects of competition on ASP's for INTC in this most lucrative market. AMD has started cutting off INTC's oxygen, as the latest INTC revenue adjustments are stating to show, and this will only continue, as the server market is commodized.
Considering the more than 5 to 1 advantage in R&D spending INTC enjoys AMD can scarcely afford the sort of boondoggles (Itanium, Presscott) that INTC is so enamored with. AMD cannot afford the luxury of the sorts of mistakes INTC constantly makes. They have to execute perfectly on everything they do, and recently that has certainly been the case. It's not so much that AMD is kicking INTC's ass $ wise, but that they are gaining share in almost every market they have pushed to compete in. Laptops and the low-end consumer markets are the only areas that AMD hasn't performed all that well in. AMD owns high-end desktops, X86/64-servers and workstations, the gamer market and the NOR flash market. These are the markets where the juice is, and AMD is either taking these markets wholesale or doing a scorched earth (at INTC's cost of business). The server market, in particular, comes to mind. Here AMD has done much more damage to INTC pricing than just capture a small market share. At this point weakening INTC monetarily and causing the kind of chaos and confusion running rampant in INTC is exactly what AMD wants to do. From that point of view AMD has been very successful.
From a psychological point of view everything INTC has been doing lately has been an attempt to persuade the world that it isn't falling apart. The constant reassessment of goals, covering everything form launch dates to revenue estimates, is just another indication of the pressure being brought to bear by AMD. This quarter should provide more evidence as to whether or not the AMD plan is working.
but they are well prepared for the change.
--Alan
Well they sure fooled me. I guess INTC was planning to let AMD take market share to keep the SEC off INTC's back? Yes, that must be it. Undoubtedly another stroke of genius by those paragons of business virtuosity Barrett and Otellini.
I would like to revisit this after the end of the year.
I'm not disagreeing with what you said, but you have to admit that there is a rather definite disconnect between what the market thinks and what we think about AMD's prospects.
Me either, I keep looking but nothing appears that's serious enough to cause worry. There may be a slight consumer buying slow down, but I don't think it will amount to much, at least yet. And it looks like business is finally stepping up to the plate. When taken together, it probably means that the weaknesses INTC reported are INTC specific.
It's not like INTC is reporting a loss; they just probably got a little carried away in their estimates, for whatever reasons. AMDs more muted guidance probably would have not made any difference to AMD's stock price. As long as INTC was going to miss AMD was going to get beat up.
Hector may think AMD controls its own destiny, but clearly the market still thinks otherwise.
I rank IBM producing for AMD right up there with DELL selling Opterons. Lots of rumors, but not much substance. For one thing I'm not sure how hot IBM would be about producing for AMD when the contract would probably be for only a year or so. AMD certainly isn't going to need outsourcing once fab36 comes online. Still....
Yes, I tend to agree with your thoughts about price elasticity. Prices for business machines seem not to be affected by price increases, probably due to the productivity advantages of a newer machine. In the consumer area gamers aren't going to be dissuaded by price increase, but the low-end could be challenged. The price increases may only appear on products where it doesn't seem to matter.
DARBES
I read the stuff about INTC raising prices on SI. It seems to make perfect sense, from an INTC point of view, since as has been commented on ad nauseum, AMD is capacity limited by only having fab30. This is especially true if INTC sees the current tech lag situation as being short lived.
Under such a scenario, AMD could either keep prices the same or raise them to match INTC. If AMD matches the raised prices then nothing has changed in the duopoly and other factors still determine market share. If AMD chooses to keep prices the same then there is just another factor besides the current tech advantages etc. that comes into play.
Whether AMD chooses to follow INTC pricing will probably depend on how much extra capacity AMD has. I kind of doubt that INTC would be pursuing such a plan if they didn't have a pretty good idea about just how many processors AMD can produce in fab30.
I would guess that AMD will probably follow INTC's price increases with their own, since the other advantages AMD has are probably sufficient to guarantee maxing out fab30 by q2/q3 of next year, even in a slow market. There is another factor to consider though, and that has to be the effect of a price increases on general market demand. Price elasticity could be a factor though I kind of doubt it will be that much.
You could probably ask the same sort of questions about Opterons. Unfortunately it seems that the acceptance lead time for radically new products is enormous. That's probably not without good reason considering a product, like Itanium, with its much longer lead time is still teething.
I suspect most users don't want to be on the bleeding edge, no matter how good the product is, so they tend to wait for others to test for them. Personally, I think this is the primary reason INTC hasn't tanked more than it has.
However once the radically new products become accepted the transition seems to move fairly swiftly. At least that's what I'm hoping for.
That would make a very nice Christmas present for us stockholders. Now would be a good time for us to start hearing more on the subject. A few product releases wouldn't hurt.
Yes, repositioning the low-end K7 Athlons(Semprons), against the Celerons instead of aginst the P4's should work out nicely. The K8s ability to take the high end desktop market has certainly altered the marketing landscape all the way down the food chain.
Now were are those pesky 90nm laptops we've been waiting so long for?
I know there is no guarantee, it was kind of tongue in cheek. But if you go back and look at AMD's earnings record, every once in a while there is a confluence of events, an alignment of the stars if you will, such that AMD has a really good quarter.
One good quarter usually leads to another until something breaks the pattern. The secret is to be in during the good times and out at other times(duh). Well, it's not that easy. A lot of us got blind sided by the production problems of a couple of years ago. But right now it sure looks like AMD is entering one of the good times.
I'm sure you will let me know when the bad times are about to start again. More likely I'll be informed at least 10 times or so before they actually do.
That 5 to 1 market advantage is a 2-way sword. Also, all that extra production capacity is nice when the market is expanding, but a killer when it isn't.
If the market really is slowing down AMD should be much better positioned than INTC. What it will mean for AMD is that there will be less pressure to outsource. This in turn would imply that fab30 at 90nm will be running closer to capacity. Having a fixed cost business running at capacity is the way to maximize profits.
Of course there's still flash. I don't know but it feels like AMD has more capacity there, even with the move to greater density chips, than they have with processors. Also, everything I read indicates that mirror bit has a substantial cost advantage which should translate to more business. In the NOR flash business AMD is the gorilla.
Yes, we both have our money were our mouths are. Actually, we're due from an historical point of view. From a statistical point of view, as long as AMD doesn't go bankrupt they're bound to have a very good quarter again, sooner or later. I just hope I'm not dead right when it happens.
Keith, Chipguy
Most of the price damage has probably been done. Unless there is a worldwide pandemic killing PC buyers off, as INTC has asserted, AMD should have a reasonably good quarter. Personally, I'm inclined to believed that non-business demand is probably slowing somewhat, but I also tend to believe that the advantages AMD has will be enough to offset any expected slow down. These advantages include slightly higher ASP's due to repackaging k7s as Semprons and the continuing move to selling more k8s. Also, q3 costs should start showing the effects of the move to 90nm and volume should be increasing as AMD takes more market share from INTC.
Right now Yahoo has analysts estimates at $.14 for AMD, but I fully expect those estimates to drop to the $.10 to $.12 range by the end of the quarter, thanks to INTC. However, I still think AMD has a pretty good shot at doing $.20, especially if INTC comes in at the low end of their current estimates.
I keep harping on this, but given the very fixed cost nature of AMD's business it doesn't take all that many more processor sales for AMD to go from making $.14 to making $.20.
I guess you probably know I don't think "Big Iron" has a future, but I sure can sympathize with you constant down market worries. I know I haven't played the market very well lately.
At times like this, when a new king is emerging, the markets are always a mess with big swings and great volatility. Adroit traders should do well. Unfortunately I haven’t had the right mindset to participate.
From Saxguy
http://www.amdzone.com/modules.php?op=modload&name=News&file=article&sid=1171
Newisys 4p Opteron sets new internet record.
Via revenues up
http://www.digitimes.com/news/a20040903B2076.html
As usual we're going to have to look at anecdotal evidence to get a sense of how the PC market is doing since the people that know aren't talking.
The above seems to indicate that all is not chaos and dispair. Interesting since both of these companies are probably more AMD than INTC oriented.
No, the market is always right. It's up to AMD to change the markets mind and earnings is a time tested method of doing so.
By the way what's this big thing you were talking about that's going to happen at IDF? INTC had better have something positive to say. Lately positive and INTC seem to be a contradiction in terms.
Well, it looks like the market isn't buying the INTC earnings revision as an INTC specific blip. 2 to 1 stock price ratio seems firmly in place.
It looks like its going to take a 2X4 of strong AMD earnings, applied to the market's head, to get the market to see what's happening.
INTC may be transitioning to 64 bits, but to which one?
Clearly INTC doesn't think much of their EMT64 offering and the conversion of Itanium with Xeons isn't supposed to happen before 2007. So just what are the 64 bit products INTC is going to be producing for the next 2 or 3 years?
Right now INTC seems so conflicted as to be almost frozen in place. Perhaps a Banias derivitive will be the answer, but again that is probably at leaset a couple of years off. INTC is in very deep dodo.
Well, I'm not a tech(anymore), and I find it extremely difficult to get enamored with a legal concept. My interest in AMD is strictly as a vehicle for making money. Although I once met Jerry, I don't know Hector, Bob, Derk or any of the boys that run AMD, but I certainly admire what they have accomplished with the clump of coal they were handed.
I'm hardly a newbee to either INTC or AMD having invested in both for at least the last 20+ years. My investment horizon for AMD was 5 years when I started selling INTC and buying AMD back in 1999. It does look like it is going to take a little longer than I thought, but as long as AMD is making progress I'll bide my time. Your right, these thing take lots of time, but if I'm anything it's patient. The good news is that things seem to be accelerating lately, thanks in no little measure to the idiots currently running INTC.
With turn-arounds there are always cusps that are only visible in hind sight. Right now it sure feels like AMD is either on or very close to the sort of shift that will reorder the chip business for the next 5-10 years.