Elmer,
BAD NEWS for INTEL I'm afraid!!!
More BUYING opportunities ahead!!!
Looks like sub 1000 market is dominant retail market 100% unit growth in less than 1 year. And Intel cutting prices to keep pace with AMD coupled with slow demand for PIII - more stock price drops ahead!!! Does Intel really want to get into a price war with AMD I ask you???.
Intel Accelerating Celeron Price Cuts to Foil Advanced Micro
Bloomberg News
May 26, 1999, 5:00 p.m. PT
Intel Accelerating Celeron Price Cuts to Foil Advanced Micro
Santa Clara, California, May 26 (Bloomberg) -- Intel Corp.,
the No. 1 maker of computer chips, is accelerating price cuts on
its Celeron microprocessors by a month to fend off Advanced Micro
Devices Inc. in the market for low-cost PCs, analysts said.
The company will cut prices of some models from 10 percent
to 20 percent on June 6, rather than waiting until July as
planned, analysts and computer makers said. As AMD ramped up
production of its K-6 processors in the past few months, Intel
has matched its rival's price reductions.
Intel and AMD are duking it out in the low-priced personal
computer market as growth in corporate sales slows and the
popularity of PCs costing less than $1,000 rises. In April, sales
of sub-$1,000 PCs almost doubled, compared with 21 percent unit
growth for the entire retail market, according to PC Data Corp.
''Intel is having to get more aggressive on pricing, so they
moved (the price cuts) up,'' said analyst Dan Niles of BancBoston
Robertson Stephens in San Francisco, who rates Intel and AMD
''long-term attractive.''
Intel fell 1 3/16 to 51 11/16 in trading of 36.6 million
shares, making it the third-most active U.S. stock. AMD rose 7/8
to 19 5/16.
Intel declined to comment on any planned price cuts. AMD
wouldn't say immediately if it would cut prices as well.
Corporate Sales
Slowing growth in the corporate PC market has raised concern
that sales of Intel's new Pentium III chip may lag analyst
forecasts. That concern, coupled with the fierce price
competition, could jeopardize second-quarter earnings for Santa
Clara, California-based Intel, analysts said.
The company has said second-quarter sales will be unchanged
or slightly lower than the $7.1 billion in the first quarter.
Analyst John Joseph of Salomon Smith Barney said earlier
this week that slow Pentium III sales could cause Intel to come
in at the low end of that forecast. He expects earnings of 52
cents and sales of $6.9 billion.
The average estimate of analysts polled by First Call Corp.
is 54 cents. In the year-earlier quarter, Intel's earnings were
$1.17 billion, or 33 cents, on sales of $5.93 billion.
Intel is expected to cut the price of its Celeron 433
megahertz chip to about $111 from about $141. The 466 MHz version
is expected to be cut 13 percent to about $145 from $167.
The last time Intel moved up price cuts, in February, AMD
followed suit, leading to a first-quarter loss. Intel has said
repeatedly it will accelerate price cuts and move up the
introduction of faster processors to gain back lost market share
in the low-end of the market.
Intel's share of the retail market fell as Sunnyvale,
California-based AMD won more customers, according to PC Data, a
Reston, Virginia-based market research firm.
In April, Intel won back some share, increasing its piece of
the market to 53.2 percent, compared with 40.5 percent for AMD.
Still, Intel's share is lower than the 71.9 percent it held in
April 1998.
Intel also is expected to cut some mobile processor prices
later in June.
|
