Andyk, Re: Even the chipset recall, which I didn't think would even cost $8M, turned out to cost $38M. Why?
Recalls are expensive. Besides the parts that Intel has to replace for their customers, they also have to junk anything they already made that was sitting in inventory.
Frankly, I don't think the recall is an important point here. I think the falling GMs are, which indicate competitive pressures, as well as the commoditization of the market.
Re: I was at first concerned about something like "NetBurst" marketing b.s. The fact that a marketing type is going to soon become CEO for the first time in Intel history is probably going to the last straw for me.
You are referring to Paul Otellini, but you are making an incorrect connection. Otellini is the one responsible for the "Right hand turn" to lower power processors (Centrino), not "Netburst". Albert Yu advocated Netburst, just like he did with Rambus, and that's why he was exiled to technical Siberia (also known as Opto-electronics).
I think Otellini's vision is good for Intel. Going towards a marketing direction is not bad when you are going up against the commoditization of PC processors, which is Intel's bread and butter. Intel needs more ideas like Centrino to take margins up to the 60% and above range, and I think Otellini is the right guy.
Right now, Intel is in a competitive slump that is hard to get out of. There is only so much that can be done when the entire technology pipeline needs to be flushed for something different. "Netburst+", a.k.a. Prescott was not such a good idea, since in hindsight we know that consumer power levels aren't high enough to exploit that kind of micro-architecture. Now Intel's roadmaps have to make due with what they have until the next micro-architecture is defined, and that takes several years. I suspect that Intel has already long since started the transition, but we may not see results in the next year or more until the new designs are fully developed.
Frankly, I'm not worried too much about Intel competing until then. Fickle investors will be the first to leave, and if you're not in for the long haul, you might want to bail as well. Long term, I think Intel will have much more competitive parts, and I think Otellini will be the one to come up with better ways to market these items to retain the margins that Intel investors have come to enjoy.
Just my opinion.
AI
