Konrad:
I couldn't understand why most analysts forgot to mention the gorgeous 96/4Q earrings was the result of the canceled price-cut? Not only Intel sold MPUs with greater margin but also freed from the price-protection fee.
Here is the profit problem: Intel has cut the prices on Pentiums during Feb. You could get P-100 $99, P-120 $103, P-133 $133 or P-166. Not only ASP has been lower, Intel also has to pay for these price-protections towards dealers with 1Q earring.
By announcing MMX2 to be available next year, it makes every buyers of Pentium MMX1 look very stupid. People does not like to be regarded as stupid while paying premium price for MMX1. It has been the main problem that Pentium MMX1 is not selling very well in the retail channels. It also showed that Intel had technology problems to develop any new processors.
Enter the 2Q, you might expect Intel another deeper price cut to battle K6 and M2. It would certainly low Intel ASP significantly. As mentioned last night, I suspect that K6- 200 is faster than Pentium II-233Mhz under both Win95 and WinNT. If it was true, you could how Intel technology reputation will be humiliated. Margins and earring would be furtherly dropped during 2Q. It would certainly be reflected to INTC price.
In addition, Cyrix has been extremely quiet towards its coming M2. M2 with better MMX has been expected to perform 32-bits applications twice as fast as Cyrix68x6 of the same clock speed. If it was true and the Pentium II was just like the benchmarks of Tom Hardware, it would force Intel to cut prices much deeper than it plans for 3Q and 4Q. (BTW, may I suggest you to buy a Cyrix P166+ to experience Cyrix technology yourself?)
For these reasons, I won't trust any of these Intel earring forecasts if these negative factors are not considered. In the next 4 months, INTC has no way but down under the double love squeezes from AMD and Cyrix. For over-priced stocks like INTC, there is no way to hope to have a moderate price modification under this kind of situation. INTC is on the verge to crash. My friend, please take Jack suggestions sincerely to get proper protection towards your long positions. You never know what would be happened tomorrow. Good luck to you! |
