backtop


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.



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

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).


"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki