Adam,
This is my guessing only, but perhaps this may contribute to Intel's gross margin
guidance for 1999 of 57%. With H1 tending towards 59%, this guidance would
suggest an expectation of H2 GM% of 55% +/- few points.
As you say, perhaps this will contribute to the slightly lower margins Intel mentioned in the CC. What I thought that was, was Intel's perpetual conservatism in future guidance, always estimating low so they can exceed expectations later. I mean, last year they were talking 50% +/- as long term GMs. Doesn't look like it. Did you notice that Joe Osha, ML, in his recent bullish report on Intel, is already expecting Q2 to be at least as good as Q1 because Intel said "flat to down". To him, that means an up quarter. Back to the server farm business and its margins, as long as I've held Intel stock, I remember Intel saying that, if the situation is right, they'll sacrifice gross margins (within reason) for the betterment of revenues. May be one such "opportunity" here.
Hey, I'm getting tired of those Sun Micro "we're the DOT in .COM" commercials. Where's Intel's?
Tony |
