About yesterday.
The most disconcerting thing to come out of INTC yesterday was the continued growth in personnel. Since, as I've said before, the time honored solution for all problems at INTC is money and people, one would have to conclude that INTC is still having problems.
What might those problems be? Well, it's kind of late in the product cycle to be having design problems so I guess the problems have to do with either producing the NGA chips or getting them out the door. Maybe yields/splits aren't up to par yet?
Anyway, both Otellini and Bryant know that having a great product isn't enough. Maximizing profit is a result of product sales and cost. I suspect that part of management’s cost solution is a reliance on INTC's much vaunted economies of scale, but as AMD continues to take market share that old solution seems more questionable. Trying to retake market share is very different from having it and holding on to it. If INTC thinks they can retake market share from AMD, especially with all the new capacity AMD has coming online, well that's not going to happen, at least not in the short run.
Suffice it to say that INTC's costs relative to AMD's are going to be a major factor in profitability, as the differences between each company’s product become less pronounced. Of course the analysts know this, and hence the bone about something nebulous happening to costs in 07. For now though it appears it's "damn the torpedoes" and "full speed ahead" at INTC.
