wbmw,
I don't foresee Intel reducing headcount more than the 5+% per year seen by attrition, nor do I see them with such a sharp decline in ASPs, at least in the near term.
I was calling it the worst case scenario. You may be right about no more than 5% per year "attrition" from the normal business, but Intel may chop off some of the unprofitable divisions by selling them, IPOs or closing them, and those could provide sharper cuts than "attrition".
BTW, cutting off the money losing divisions is the best near term opportunity for increased profitability (ignoring the associated one time charges).
It will probably take 3 quarters for Intel to recover from the kamikaze pricing of mid-2006, assuming Intel management acts rationally from here on.
At least in Intel's case, their price points on current products are being lowered while new products are replacing the current high end. AMD plans on lowering prices without a new product in their high end.
New Intel products are not replacing current high end Intel products, which is the problem with Intel price cuts. New chips will at some point be replacing the current one, but there is a period of drought between the time dramatic price cuts started and the time the new products start to contribute to the bottom line.
But anyways, good luck on those Jan 2008 leaps. I may pick up a few as well.
I think there will be plentiful opportunities to get these probably at lower prices, as the Wall Street realizes what the pricing is doing to Intel's top and bottom line. One way out of the current misery (share-price-wise) would be a swift action on unprofitable divisions, which I think is the only risk buying now, instead of waiting for upcoming lower prices.
Joe
