Re: Intel has cut the number of Celeron and boosted the number of Coppermines....
Thanks for your reply, Joe.
The time frame for this scenario is end of Q3, Q4, and early Q1 2001. I wouldn't expect INTC ASPs to drop to the levels of AMD at the end of the K6 "era" ($50), but drop they will. INTC will continue to do very well in business desktops and servers, through momentum if nothing else. But I think there will be a big cut in ASPs in the small business / consumer market, which is most significant during this Q4 period.
If VIA is shipping quantity at the low end, there won't be an overall CPU shortage to put a floor prices (this effect saved the K6 ASPs in Q1 of this year). Low end and mid range Celerons, Durons, PIIIs, and Athlons will have to show a performance delta to justify their price delta. The result could be a big drop in ASPs for INTC in this (large in Q4) sector.
Even if VIA is blocked from selling its low end chips in the US, most of the market for these chips is outside the US. The displaced product (from INTC and AMD) would be available for sale in the US. VIA may even not bother trying to sell its CPUs in the US, that certainly would the ITC out of the equation.
OTOH, Corvette's time frame is similar to Willamette's, so INTC should have a pretty open field for portable systems in the period. K6+ is significantly outperformed by portable PIII, so those ASPs should remain high. Even if Corvette is out in the period, like Willamette, it most likely won't be quantities sufficient to have much affect on overall ASPs. AMD is relegated to selling K6+ only for low end portable machines.
But desktops are still most of the market, so I see a disappointment for INTC in Q4. If the 5 million mid and high end chips that would have sold for an average of $600 sell for $300 instead, it decreases profit by $1.5 Billion for the quarter. That's a worst case, but it would take EPS down to the 40 cent range.
Regards,
Dan |
