Barry: Good list of pluses and minuses, but you left out a big minus: For what most consumers need to do with the computer, they no longer need Intel's high end, high margin chips--its (or its competitors) low end, low margin chips are perfectly fine for surfing the web, sending e-mail, and writing the occasional letter.
Will the low end chips satisfy state of the art business needs? Of course not. But for the first time in many years there are no killer consumer aps out there that require a high end CPU. Margins for Intel in the consumer end of the business will be crushed until one emerges.
One other minus, although a temporary one: Many of Intel's major customers are moving to a build to order model, which requires less inventory on hand. As CPQ and HWP, just to mention two, cut their inventories there could well be a shortfall in Intel's sales and earnings, and if it is going to happen, it will happen this quarter and next. By spring this factor will be out of the way, but it could create a nasty negative earnings surprise in the interim. |
