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Print 24 comment(s) - last by ICE1966.. on Jul 18 at 2:36 AM

Intel cheers as AMD silently weeps

Intel Corp. had a quarter of ups and downs.  It was shocked when the Federal Trade Commission announced that it would be formally investigating whether the company, which controls roughly 80 to 90 percent of the worldwide microprocessor market, abused its dominant position in an illegal fashion. 

Despite this down, there were numerous ups.  Amidst a war of words with NVIDIA, Intel forged ahead with its upcoming discrete graphics offerings, set to take on NVIDIA and subsidiary ATI, owned by its chief microprocessor competitor, Advanced Micro Devices (AMD).  Intel also was pleased to see a strong Centrino 2 launch with many partner products, after concerns stemming from some initial glitches and delays.

Intel now has even more good news -- the company just announced a strong quarterly report.

With reports from competitor AMD, Google Inc, International Business Machines Corp and Microsoft Corp all coming later this week, Intel set the bar high.  It reported a 25 percent rise in profit, thanks to healthy notebook processor demand.  It also beat expectations with its forecasted revenue.

The only disappointment in the report was in the gross margin, which fell slightly below the middle of Intel's projected target range.  This is thought to be again fueled by the same thing that boosted profits -- strong demand for cheap notebook computers.

Some are critical that despite the otherwise strong report the gross margin is a sign of weakness for Intel.  CRT Capital Group analyst Ashok Kumar stated, "The concern on the Street was that demand may be falling off the cliff. We've seen that in the handset market. So at least as Intel's results and outlook goes, we're not seeing similar weakness in the PC market."

However, even Kumar couldn't deny that Intel did well over the quarter, despite this troublesome indicator.  He added, "The only mild disappointment was in the gross margin line due to a higher mix of low-end notebooks, but overall I think the result was a surprise on the positive side, given the macro environment."

He argued, "I think right now investors are looking at technology as a glass that's half-empty and not half-full, but relative to other sectors, the negative earnings revisions in technology have been more mild.  And if we can navigate through seasonally weak summer months, we should get a seasonal tail-wind for the technology sector."

Intel's Chief Executive Paul Otellini on a conference call with analysts cheered the good news and added, "Demand for our leading-edge computing products around the world continues to be strong, with revenue and unit shipments towards the high end of the seasonal norm."

Chief Financial Officer Stacy Smith told Reuters said the strong demand will continue in the second half of 2008, "The demand signals we're seeing are pretty strong."

Intel remains successful in the face of a key shift -- with notebooks finally surpassing desktops in sales, a feat long predicted.  This year notebook sales for the year are expected to indeed pass desktops for the first time.  Intel seemingly confirmed this saying that for the first time in excess of 50 percent of all the processors it shipped were mobile processors.  CFO Smith remarked, "It's a pretty important milestone."

Tough times may be ahead as Intel weathers the FTC storm and attempts to carve out a spot in the discrete graphics market, but it seems in good shape to meet the challenges that await.



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Falling off the cliff?
By dwalton on 7/16/2008 3:17:37 PM , Rating: 3
Isn't Intel bolstered by the falling dollar as most of its wafer fabs are in the US and with a weaker dollar the more inexpensive the Intel's cpus becomes to world outside of the US?

Haven't the demand of the markets outside the US been growing lately. So where does cheaper cpu + growing demand in the world suppose to equal demand falling off the cliff.

It seems to me that most analysts are focusing on the stagnant US market and not enough of the world market, where overall growth is positive.




RE: Falling off the cliff?
By teckytech9 on 7/17/2008 2:03:50 AM , Rating: 2
The increased notebook processor demand could be attributed to developing countries expenditures for cheaper laptops. The OLPC program prompted Intel to deliver laptops to these countries in large numbers.

Margins are pretty thin when the dollar is depreciating, inflation is rising and cheap laptops are in high demand globally. This could probably explain why the stock failed to rally on the news.


Hillary wants those profits
By hellokeith on 7/17/2008 4:02:23 PM , Rating: 2
How come no one is complaining about Intel making a profit? I thought making billions of dollars in profit was not politically correct? Shouldn't the government double or triple tax those profits? Or just take all the profits and give them to poor people who can't afford a computer or have internet access?




Holy Cow
By ICE1966 on 7/18/2008 2:36:36 AM , Rating: 2
If all of you people who use to have AMD systems would have not bought the sorry ass Intel junk, AMD would not be losing money right now, thats the real problem. Hell yeah, tax the crap out of them, they can afford it. I say tax the hell out of Intel, the government does Oil companies.

**************************

Sounds crazy, right? it was meant to be.

rofl




Nothing can stop... THE ANIMAL!
By therealnickdanger on 7/16/08, Rating: -1
RE: Nothing can stop... THE ANIMAL!
By xti on 7/16/2008 12:20:42 PM , Rating: 2
there goes a minute and a half of my life that i will never get back...


RE: Nothing can stop... THE ANIMAL!
By Indianapolis on 7/16/2008 12:50:47 PM , Rating: 3
Don't follow the link. It's just a home video of a little kid playing with a toy monster truck. I'm not going to waste any brain cells trying to figure out why the poster linked it.


RE: Nothing can stop... THE ANIMAL!
By porkpie on 7/16/2008 12:56:06 PM , Rating: 2
He's obviously the one playing with the truck, of course. The steps some people will take for free publicity...


The end of the desktop PC
By pauldovi on 7/16/08, Rating: -1
RE: The end of the desktop PC
By silversound on 7/16/2008 12:36:23 PM , Rating: 3
Great news for intel,
THeir CPU is great, but motherboard chipsets are worse compare to AMD's offer.

And the centrio2 does not deserve the name change too, only few changes in FSB and platform, not revolutionary at all compare to core2 from P4. I think might be a marketing stategy to stimulate sales..


RE: The end of the desktop PC
By Oregonian2 on 7/16/08, Rating: 0
RE: The end of the desktop PC
By FITCamaro on 7/16/2008 4:06:19 PM , Rating: 2
ATI's chipsets are quite good.


RE: The end of the desktop PC
By Silver2k7 on 7/17/2008 6:33:11 AM , Rating: 2
your saying that AMD(ATi) are making Intel motherboards.. thats kind of strange even if they make money of it, how come intel allows for it =)


RE: The end of the desktop PC
By Oregonian2 on 7/17/2008 3:03:46 PM , Rating: 2
Note that I didn't ask who made chips or if they were any good, I was talking about marketshare quantities. ATI made chipsets for Intel CPUs (not any more maybe?????) but as I said that wasn't my point.

If one opens up MB's and looks to see who made the chipsets, my understanding that in terms of quantity sold that they're mostly nVidia and Intel made chips (why I got ding'ed for that I don't understand -- if it isn't true, just say so).

What is ATI's marketshare in MB chipsets?

P.S. - And when I say nVidia made chipsets, you know what I mean -- even though they really don't make any chips (actually made by foundaries like TSMC, etc).


RE: The end of the desktop PC
By JasonMick (blog) on 7/16/2008 12:37:14 PM , Rating: 2
I'm guessing they will simply move to enthusiast laptops and laptop products....
I mean processor for laptops are already almost as good, the only thing holding them back really is the graphics cards and bus speeds.

Of course speeding up the bus, or adding more stream processors can be power intensive, so the key will be technologies which switch speeds or switch between discrete graphics and integrated graphics when not on plug power or not gaming. Both AMD and Intel have spearheaded efforts on such technologies, so they should soon be refined and very useful. Centrino 2 already features such tech.

The enthusiast market will never die while there's enthusiasts. In fact, it will probably be a lot more fun as you'll be able to have a more mobile machine.

With the notebook market finally gaining dominance, it will only be a matter of time before graphics manufacturers can't get away with passing off piddly 32 stream processor cards as a "high tech" notebook graphics solutions.


RE: The end of the desktop PC
By pauldovi on 7/16/2008 1:28:03 PM , Rating: 3
How can I watercool my laptop. :(


RE: The end of the desktop PC
By TETRONG on 7/16/2008 2:01:12 PM , Rating: 2
By Captain Orgazmo on 7/16/2008 5:56:29 PM , Rating: 3
Drop it in the bathtub.


RE: The end of the desktop PC
By dwalton on 7/16/2008 3:26:30 PM , Rating: 2
Desktops will always be more powerful and thus have a place in the market.

Desktop don't have to deal with limitations and restrictions that are inherent in any notebook design.

There is little work involved in changing a great notebook cpu into a better desktop cpu and there will always be people where portability isn't a priority.


RE: The end of the desktop PC
By Silver2k7 on 7/17/2008 6:39:57 AM , Rating: 2
the drawbacks with laptops as i see it, never owned a laptop either.. but whaterver ;)

Poor upgradability, you can't change video card or motherboard..
You can't add a few more hard drives.
That new blu-ray burner migh or might not be avalible in laptop form--factor.

The screens almost always are kind of poor and bad visability from an angle..

I like to feel when punching keys on a keyboard like an old IBM or a modern Logitech G15.

Often laptop parts perform worse per dollar compared to dektop parts.

I hate those little windows thats supposed to replace a real mouse.

ok that was my main hurdles with laptop puters =)


RE: The end of the desktop PC
By MrBungle123 on 7/16/2008 2:01:47 PM , Rating: 2
The enthusiast market is a niche as it is and companies contiunue to produce products aimed at them. So long as there are people that like to hand build their own systems there will be product development to suit their needs(wants).


RE: The end of the desktop PC
By borismkv on 7/16/2008 6:35:57 PM , Rating: 2
I seriously doubt it. Hardware development has always gone from the PC to the Laptop. As time progresses this will continue. Desktops will soon begin incorporating Laptop sized components (2.5 inch hard drives are already being used in servers and will start becoming much more common in Desktops) and laptops will begin using newer, smaller components (1.8 inch drives are starting to become usable for laptops).

The major strength of desktops is in standardization. The vast majority of desktop components will fit in the vast majority of desktop computers. The major producers that avoid the set desktop standards usually end up with a bit of public backlash when they do so.

Laptops, however, are forced to deal with cramped space, and every manufacturer handles construction differently. As a result, much of the laptop's parts can only be used with the same model. This adds a great deal of additional cost during a repair, both in time spent troubleshooting and repairing, as well as in materials cost. A lot of manufacturers (Apple in particular) avoid using standards so they can make even more money on repairs.

Ultimately, Desktops are going to be around for a long long time.


RE: The end of the desktop PC
By InternetGeek on 7/16/2008 8:28:30 PM , Rating: 2
I think you have it backwards. Intel is the speed king now because they started to use mobile technology on their desktop offerings. Core used to be a mobile technology that did not include HT but was very efficient both in from a speed and power consumption point of view. Though Centrino refers to the whole platform, the whole thing started when Intel lauched the M processors (Pentium M and so).


RE: The end of the desktop PC
By borismkv on 7/17/2008 5:17:38 AM , Rating: 2
Except that not even Intel expected the Centrino platform to perform as well as it did. Interestingly enough, the Pentium M's are closer to the Pentium III in architecture than they were to P4s.

The real capabilities of the Pentium M was limited, though, by the fact that it was shoved into a laptop. A slower clocked M could beat the pants off of most Pentium 4s (Not hard. P4 was crap from the start. The early P4s couldn't compete with similarly clocked P3s). However, there was a severe limitation in that it was impossible to deliver enough power to the CPU to truly unlock the Ms potential. This can be seen in some benchmarks during the short period that there were desktop motherboards that could run Pentium M chips. So Intel took portions of the design to the Desktop and it blew the roof off of everything. Now we're getting to the point where the same potential is able to go back into laptops, because CPUs are becoming much more efficient.

That's the way it works. You use the Desktop to perfect a design because it's not nearly as limited by power or size restraints, and then you put it in laptops.


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