Wanna Re..Intel is in a bad position right now, and one reason is tough competition. That's right! AMD has participated in a price war, and has hurt Intel's bottom line. If this were a game of who can hurt who the most, then AMD would certainly get honorable mention, and I'll admit that<<<<<<
First off, Intel started the price war. According to Businessweek,
Rival Advanced Micro Devices (AMD ), however, hopes to throw a monkey wrench into that plan. The scrappy upstart, locked in a bitter battle with Intel, has made major inroads since 1999, when it introduced its Athlon processor. The chip, which was faster than Intel's Pentium III, was quickly snapped up by PC makers, especially when Intel couldn't make enough processors to meet sizzling demand during the Internet heyday. AMD, after nearly two decades, finally put a dent in Intel's market share.
NO SWEAT. This year, Intel counterpunched. It slashed prices on its Pentium 4 chips by 84%, dragging AMD into a savage price war.<<<<<<
You will note according to the businessweek article, Intel started the price war. You will also note that Intel intends to start anew tomorrow, when Intel plans to slash their prices on P4 by 30%. Intel was hurt by the price war because Intel decided to wage war.
Additionally, terrorist attacks have plunged many retail markets into slowdowns that have compounded the already bad economy. Businesses, too, have had to consolidate and slow down their purchases. It is these effects that hurt Intel much more than AMD
That indeed is part of the problem, but only part.According to Businessweek <<<<<Oh sure, there isn't a tech exec on the planet who isn't having a crummy year because of a souring economy and the threat of war in the wake of the terrorist attacks. But Intel's problems run deeper than these events. For the past three years, Intel has seesawed between product shortages and product delays in its core computer-chip business. Piled on top of that have been embarrassing bugs, recalls, and overpriced processors that opened the door for rivals. By yearend, analysts expect Intel's share of the PC chip market to drop to 78%--nine percentage points below what it had when Barrett took over.
Barrett's invasion into new markets has been even more dismal. So far, some $4 billion of Intel's more than $10 billion in new investments have produced little. This year, Intel stopped making network servers and routers after some of its biggest chip customers, including Dell Computer Corp. (DELL ) and Cisco Systems Inc. (CSCO ), slapped Barrett's hands for competing against them. In February, Barrett shut down a service for broadcasting shareholder meetings and training sessions over the Web. He shuttered iCat, an e-commerce and hosting service for small and midsize businesses. And he has retreated so far in the information-appliance business that Intel now markets its Web-surfing devices only in Spain. "Certainly, Craig's vision looked a lot more attractive a year and a half, two years ago," sighs board member David B. Yoffie, a professor at Harvard Business School.<<<<<<.
Re.. On the other hand, since you are an AMD investor, I find it hard to believe that you can be ignorant of AMD's current situation. As usual, you find them to be a terrific buy, despite the fact that they are heading back into debt, and have several more quarters of loss to go before analysts even estimate that they will break even again.<<<<<<<<
True, but at this point the loses are built into the price. It was assumed Intel would win the price war; and the stock price didn't drop as far. What happens if Intel can't win their impending price war starting Monday. Secondly, AMD's loses were mostly paper losses; Deprciation etc. AMD kept their cash, and can run for several yrs at current prices. Can Intel? After spending all of that money on fabs they don't need, it will cost Intel money to let then run idle until the uptick.
Meanwhile, Jerry Sanders has bet the company once again, and this time on Hammer, Hammer, Hammer, and obviously you have fallen for the bait. <<<<<
Huh, Athlon xp is the highest performing processor out there right now. Northwood isn't coming until Jan 02, and Intel is dropping Tulloch chipset. Most of their P4s are selling with the i845 chipset, which will cheapen the Intel Brand. Have you seen the PC- World rankings. Only one P4 was listed out of 15, and it wasn't in the high performance segment. If you think that is a fluke read the current C/net rankings. http://computers.cnet.com/hardware/0-2645860-8-5577589-1.html?tag=st.co.1016.bhed.2645860-8-5577589<<<<< It is amusing that in the top 5 business computers ranking, Intel holds only one slot, while AMD holds 3. Do you really think Intel can keep their business sales, when their business computers are ranked so poorly.
Yes, , in 2003 the future will be Hammer, and if it is half as good as its review, AMD will do just fine. Intels only hope is that Northwood will fix P4's deficiencies, more than .13 and SOI helps AMD; which seems to me to be a longer shot than betting on Hammer .
You may not like Paul, but he's been around the block a few times, and he knows a hell of a lot more than you.<<<
Paul may have started more fires and insulted more people than all of us combined will do in our lifetime; but that hardly make him a great investor. Great investors make the call and buy or sell before the move, not after. |
