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Intel has a terrible quarter.
October 11, 2000 9:38 PM   Subscribe

Intel has a terrible quarter. Is the PC industry in the toilet, or is it just Intel executing badly?

It's just Intel executing badly. (Reports of the demise of the PC industry are greatly exaggerated.) AMD has another great quarter and appears to be stealing Intel market share.
posted by Steven Den Beste (9 comments total)

 
And they're about to have the crap beaten out of them next quarter when people realize that the P4's are gonna be 20% slower than the P3's were clock-cycle-per-clock-cycle. It's not looking good for Intel.

And here I am sitting on Intel shares. And to think I got a great deal on 'em @ $46 USD / share. :(
posted by PWA_BadBoy at 10:33 PM on October 11, 2000


As long as they are making a profit i don't see the problem. Shareholders nowadays are way to greedy. Everyone should follow Richard Bransons example, he owns Virgin, and keep their company privately owned.
posted by Zool at 11:04 PM on October 11, 2000


A profit for Intel is not a foregone conclusion indefinitely. They have massive capital expenses every year because they are constantly upgrading their fabs, and the only way they can maintain plant is through huge sales. If AMD starts stealing a significant portion of their volume, Intel's finances could change really rather rapidly.

In the last year, Intel has made at least four major blunders (and one minor one). And they're continuing to make mistakes; read this section about the Mamba and then contemplate that the prior chip, the Samurai, was designed for Intel but Intel wouldn't license the bus. They drove Micron into the arms of AMD. Do too much of that and soon you have no friends left. And not even Intel can go it alone.

Finally, there's reason to believe that AMD will win the next generation. From what I'm reading, the Thunderbird/Mustang will be superior, clock-for-clock, to the P4 in most regards. (Each will be better in some ways, but the Athlon will be better in most ways.)
posted by Steven Den Beste at 12:20 AM on October 12, 2000


PWA, you left out that the P4 only works with Rambus. Imagine our joy. The Thunderbird works with DDR-SDRAM.
posted by Steven Den Beste at 12:22 AM on October 12, 2000


Yeah, that too Steven. Heh.. And it'll still suck with RDRAM. My next machine's gonna be an AMD.
posted by PWA_BadBoy at 7:45 AM on October 12, 2000


First off, "terrible"? Because Intel says that, rather than 5-8% growth from the previous quarter, they'll have "only" 3-5%? Steven, do you have any idea how many companies would kill for those numbers?

Second, AMD has expenses that scale just like Intel. And they operate at far lower margins -- AMD, according to that quarterly report you cite, operates at a net of 17%, while Intel operates at a net of 40-mumble percent... 42% in Q2.

Part of the reason AMD has been able to take market share is that the PC industry in general has been so robust that even Intel, with all its fabs, can't meet demand. But sooner or later, AMD is going to become just as production constrained, and they just don't have the finances to build additional fabs as fast as Intel will. Fer chrissakes, AMD just became profitable, what, 2-3 quarters ago? After years of being in the red? One of the reasons their number look so good now is that their numbers have looked so crappy in the past, and that's where the comparison is being made.

As to technical chops... C'mon. You've been around long enough to know technical chops don't necessarily mean better sales than your competitors... Or else in the O/S field we'd have the great religious war between those two dominant companies, NeXT and Amiga. :)

But as long as Intel's net profits exceed AMD's gross sales, AMD is not a serious threat... Just something to delude the FTC and DoJ into thinking the one real monopoly in computing doesn't exist (wanna bet Intel is a major investor in AMD?).
posted by aurelian at 10:38 AM on October 12, 2000


All of my machines are AMDs, and guess what....you can't tell the difference! (except that they were way cheaper to build and none of them have been recalled!)
posted by jaz at 10:22 AM on October 13, 2000


The PC industry is cooked. Saturation. Its all about upgrades now. The PC revolution is over folks. Intel, Microsoft, Dell, etc.. good stocks, but they arnt going to be the high flyers of the 80s and 90s.
posted by stbalbach at 8:23 AM on October 15, 2000


This guy thinks Intel is in deep trouble; he's looking into the future and he sees Intel getting its ass stomped.

posted by Steven Den Beste at 8:16 PM on October 15, 2000


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