Zeev:
Good comments.
Also working from memory (I will be looking at this in the coming week) I believe that Intel has two shots at RMBS warrants, with one of them relating to moboard/chip sets delivered that have RMBS compatibility. Also, I would expect that "renegotiation" has been at work in the back rooms on these matters.
I believe that Intel, or indeed any of the involved players would go to considerable lengths to be able to exercise RMBS warrants. The gains are huge, and they flow virtually unimpeded to the bottom line. The boost to reported earnings is substantial.
I agree with you about Intel's basic strategy (micro as primary bottleneck) but "the best laid plans of mice and men,...." etc. Intel is being forced from a proactive to a reactive stance by its competitors.
Time will tell whether Intel stays the course with RMBS. I think they dump RMBS (surreptitously of course). The level of commitment displayed of late hints at this, but we shall have to wait and see. As neither Intel nor RMBS make the RMBS chips, to some extent, it is the memory producers who will make this decision anyway, and I think they make it based on the size of the perceived market (so far, nothing encouraging here), the costs involved (again, so far, not the stuff of dreams), and the profits that might be made (this is "pure ugly" so far). Even with the big Intel-provided "incentives" of last year (totalling well over half a billion dollars), they haven't exhibited enthusiasm.
I also agree that the margin juice in the micro business is at the top end, but;
(a) that part of the market is not growing) and (b) AMD is starting to muscle in. Intel couldn't deliver high end micros for many months. AMD could and did. Hard for Intel to dominate when it can't deliver.
This thing won't get to court, IMHO. As noted earlier, the whole deal can be strung out and stalled in preliminary legal activity for years. In this game, two years is eternity. A "work-around" appears inevitable to me, but that is strictly an opinion. We shall see.
I have to admit to paying close attention to your calls as they have been excellent. I will enquire as to where you buy your famous "turnip" seeds when this frenetic period slows a bit. They have served you well. (g)
Best, Earlie |
