Joseph Pareti, re: "any idea of Intel's '98 bottom line?"
So far I've looked at pricing for Intel's desk-top CPU's. My data base is from a collection of Lehman Brothers price sheets.
Jan'97/Jan'98 pricing.
As noted by a number of analysts, Intel's latest price rounds have been more drastic than historically.
Based on my data base, the ASP of the January 1998 product mix is lower than that of Jan 1997. (Of course there's been a change in product mix, since PII wasn't introduced till May). The PII product mix today has a lower ASP than the Jan '97 P55C, and P55C mix today is lower than Jan '97 P54C. (The additional fab costs of the PII will probably impact margins).
December 1998 price extrapolation.
If we use historic learning curves we can extrapolate the approximate prices for December 1998. These are about:
PII333 $360
PII300 $265
PII266 $185
PII233 $135
P55-266 $150
P55-233 $100
P55-200 $95
P55-166 $85
These appear to be lower than Dec'97 equivalent pricing.
Covington
I don't have any idea where Intel will try to position this product, (it's probably performance dependent). If they position it between P55 and PII they'll probably need to change from their historic price structure. (Not much room between these two). If they use it to replace P55C the makers will want at least equivalent performance, which it may not provide. If they place it below P55C the price will probably need to be very low. From a marketing standpoint, I wouldn't like to see a "PII" below P55C.
Compaq, et al, will have influence on this decision.
New products
Most likely the biggest factor for Intel this year will be the transition to .25 micron. This will lower costs and provide higher speed bin-outs. Historically, users got the speed enhancements for free. By this I mean, Intel typically has eight or so CPU's for the desk-top market. The mix continuously moves up the speed scale while prices for the product mix remain fairly constant.
FY'98 earnings.
From the Desk-top CPU aspect, it looks to me that Intel will need the projected increase in units shipped to maintain flat earnings. (It also partially explains the anticipated decrease in margins). This is in line with current consensus estimates. ( Note the consensus est. was $4.73 in October and was lowered to $3.97 this month). As noted by most analysts, they key unknown in all of this is the performance of AMD. If they crash and burn Intel will be able to flatten the learning curve. If AMD cranks out .25 micron product later this year I would expect earnings estimates to come down.
As usual, these are my own opinions and aren't based on actual facts. |
