"Poll predicts Q1 at $0.15 (greater than 50% decline in eps year/year)."
That's what I mean by revised analysts projections. This is already factored into the stock price (hopefully).
1. INTC units shipped in Q1 could decline by 20%, maybe even 25%, sequentially and suffer a further decline in Q2.
Almost certain.
2. INTC's margins, now 51% vs. Q4's 63% are eroding more rapidly than at any time in their history.
I don't think so. I believe they were eroding faster just prior to the release of the 386.
3. non processor businesses which account for 20% of revenues have fallen off a cliff and as a result are looking at operating at a loss for the remaining months of the year.
Agreed.
4. The capital investment arm has taken a beating and can no longer contribute its 33% of eps value...In fact, it might now drag on earnings (perhaps significantly so) if write downs (i.e INTC has to book investments at the lower of market or cost) are required.
This may however, only have a negative impact on this quarter.
5. P3 and celeron are in their twilght months as the entry level will be 1 gig by the end of Q2, a level atwhich they can't apparently produce in major volumes.
I think that both AMD and Intel are finding it difficult to push the entry level beyond 700 MHz. Of course, if AMD does not ship any processors below 1.0 GHz, and AMD systems are cheapest, then entry level will reach 1.0 GHz by default. This does not however, appear to be the case. Duron is ramping fast, and 1.0 GHz will be the peak speed grade of Duron by end of Q2, if Duron reaches 1.0 GHz at all.
6. P4 has too many hurdles in front of it to offset in any significant manner the eroding margins and declining market shares stemming from the quickening obsolescence of the P3 and celeron.
Not at all true. Shifting production from P-III to P4 will ease the glut of P-III processors on the market thereby easing downward pricing pressure. Additionally, Intel will not be limited to P4 only attracting customers who would otherwise only purchase P-III, some potential Athlon customers will be attracted by the clock rating of the P4. The ASP of P-III may even stabilize in Q2 with the introduction of Tualatin, but too late in the quarter to make a difference.
7. Mobile, server and workstation spaces, which hitherto have been uncontested by AMD, are about to be assaulted by the palomino family of processors, reinforcing negative pressure on INTC margins which are already under siege in the consumer space owing to the spry Athys presence...
Mobile Palomino and mobile Morgan should both be entering the market in multiple notebooks by the beginning of Q3, but prior to this they will have almost no presence. Because it requires new designs, Mobile Tualatin probably will not have a significant market presence before mid to late Q3. I would look for AMD's Christmas season sales of mobile Duron to match their current retail market percentage of midrange systems, and mobile Athlon percentage to not be all that far behind.
With MicronPC exiting the picture. I would look for AMD's server sales to be dead in the water until the release of Sledgehammer, unless they do something radical, such as licensing the Palomino core to IBM in exchange for IBM committing to no longer using Xeon in their server lines. |
