Intel Corp (INTC)

[morrowinder]

Chipguy: yes this is true but...

The US market=US retail/consumer and IT. IT is definitely the more significant part.

I would expect IT to be flat to down but it won't be that bad.

US retail on the other hand is a different situation.

Facts about US retail:

it has steadily shrunk as a portion of intel revenue. At one point it accounted for 10% of intels earnings a long time ago but that is no longer true.

AMD has been very competitive there for years. Generally Intel battles it out of MSS and the weaker of the two has to discount heavily to win designs. HP is a huge factor here. They dominate US retail sales. And they favor AMD for notebooks and desktops typically, especially at the lowend.

US retails ASPs are awful. Desktop prices have steadily fallen of a cliff(thank you walmart/best buy). Laptops made up for this but now they are going down the toilet as well.

Intel is investing less and less in US retail.

SO if demand tanks in retail it will hurt intel a little. But it will hurt AMD more. You can judge for yourselves. Black Friday is coming up soon and no doubt best buy and walmart will give away the farm to generate demand. If it doesn't work discounts will increase throughout christmas.

Bottom line: US retail will probably be pretty ugly this year. But there could be decent volume on the lowend. People like Sony and Apple could face some bigger dropoffs if people close their check books.

The good news for intel is this is not a growth area for them and it has steadily been outgrown by latin america, APAC, russia etc...so I don't believe it will hurt that badly.