Comments on Intel's "OTHER" markets
Although Intel always reports these non-CPU related businesses as combining for a huge loss, this may not really be the case. Thrown into the "OTHER" category are some of Intel's option grants to employee's, even though these grants are mostly connected (~80%) with the IAG (Intel Architecture Group) employees. So, actually, the IAG group is less profitable than everyone has been assuming and the "OTHER" groups may actually be profitable in aggregate. In addition to that, the following statement also basically says that the revenues allocated to the IAG group are bogus -- they include reserves for deferred income on shipments to distributors -- IOW, the IAG revenue (and therefore earnings) numbers include sales to distributors that have NOT sold through to end users.
From the earnings statement:
The "all other" category includes revenues and earnings (losses) from non-reportable operating segments: the Wireless Communications and Computing Group, the Communications Products Group, the Network Communications Group and the New Business Group.
In addition, "all other" includes certain corporate-level operating expenses (primarily the amount by which profit-dependent bonus expenses differ from a targeted level recorded by the segments) and reserves for deferred income on shipments to distributors not allocated to operating segments. Adjusted for this distributor deferral, IAG revenues would be approximately $6,760 million in Q2 2000, $6,650 million in Q1 2000 and $5,850 million in Q2 1999. Accordingly, "all other" revenues would be approximately $1,540 million in Q2 2000, $1,340 million in Q1 2000, and $900 million in Q2 1999.
Its pretty obvious that Intel's breakdown into operating segments, which is required by the SEC, is a useless exercise.
Also, I think AMD may soon exceed Intel in Flash revenues. One of th recent brokerage reports said that AMD was 1% behind Intel in market share. Considering the total lack of information in their operating group breakdown, Intel's claim to be numero uno in flash sales is not defendable.
Petz |
