WBMW,
On the surface, this quarter was a bit of a disappointment... That Intel made .39 is actually a bit of a stretch when one considers that the average weighted shares actually went up over the quarter, even after they bought back 23M shares... They would have needed to buy back about $600M more stock in order to break even. IMHO, that in theory makes the quarter look a little worse...
Now, for the good news... I like that Intel is making a major foray into mobile processors... Intel also needs to ramp up as a foundry. They need to apply pressure so that the other foundries will have to make some painful decisions when deciding whether or not to invest in new equipment. Intel, for some time, has only viewed the processor race from the design side. Now, when almost everyone else is a fabless design shop, Intel needs to look at the companies that fab in order to compete across the board. By not competing as a foundry, Intel has allowed foundries like TSMC to strengthen. As a result, Qualcomm enjoys the luxury of a foundry base that has ample profits to reinvest in process shrinks. Intel needs to shut the door on these profits now... Once foundries start making less money, the manufacturing gap will increase by an even wider margin... It will also allow Intel to spend at a slower pace lowering the depreciation line on the income statement. IMHO, once Intel's competitors have a mature process node, Intel should relax it's policy on chip production at that node to include those companies with which Intel competes. Intel should act to maximize capacity utilization in its own Fabs
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