Hi John and Thread, My reaction to the webcast...
I was glad to see the return of focus to the core business too.
The webcast was very well done. The market research information, all throughout the presentation, especially the slide regarding Internet usage, was very good, informative and useful. I like presentations that have raw data like this, it had raw content, not fluff. I hope they continue conducting webcasts with both the video and powerpoint slides. The video adds a lot of value - I like to see facial expressions, because that's a big part of the message. The talks were quite good. It was an excellent webcast. I hope they continue in this style, with all the market data and video included.
I liked how Barrett's opening talk addressed the big picture of what's going on with the industry.
I remember in a post I had asked if something more sinister was going on with the economy and what exactly is this we're going through. I hadn't thought of it in the context of history. In Barrett's talk, he said we're experiencing a cycle no different than past historical cycles: after an initial invention revolution, there's over-investment, followed by turbulence, then 'reasonable' growth (which he defined during Q/A to be 15% to 20%.)
I think the only thing I had a reaction to, which is more about me, than about the talk, was when he said the downturn was worse than anything folks who have worked in the industry for 30 years, have ever seen. That bugged me. Frankly, it scared me. But of course, anything that's worse than the '70's would scare me. I have no reference point to what could be worse than what's happened economically in the past 30 years. He said the downturn was 2X's slower than the downturn in 1985. That didn't scare me. But the comment about it being worse than anything they ever saw did.
It had me wondering, what data points are there that I can connect this to? None. It's worse than the '70s, so not even that (not so good) data point is available as reference. What's the worse case scenario? What other bad thing happened prior to the '70's? His comment about this being like the industrial revolution, radio invention, auto invention, made me think, is this (the economy) going to be as bad as what happened at the end of those great inventions, like the Gr Depression? From history, I associate the invention of the radio with the Gr Depression. I associate the auto industry with the near bankruptcy of the '80s. What was that great invention during one of the revolutions that ended up being an investment failure? RCA? Anything related to the end of any initial stages of an invention revolution, I associate as being very bad for the economy. On the other hand, if you look at the Gr Dep. from a stock standpoint, an investor could have done absolutely great if they bought stock all through the 30's.
I wish there would have been more discussion around what happens after the end of the initial phase of an invention revolution, because that's history that I lack, so of course, it makes me more concerned when I don't have past data to understand what the recovery may be like. More information would be helpful, even if discussed in the context of past invention revolutions.
But I think Intel will be incredibly well-positioned when this does turn around. Intel is good at decreasing costs, they've regained focus, regained leadership through the Breakaway strategy, and are now showing good signs in the network communication business. The most important thing though is the Internet is being used increasingly more and more, and we're only at the beginning of Internet usage.
Paul O said something very positive: unit shipments were on the order of the boom during 2000, so that's a good sign in terms of people wanting to purchase PCs.
Ron S (or it may have been someone else?) said something that was really good, "Internet traffic has risen drastically during even this downturn (4Xs?)." But meanwhile the communications industry is going through a downturn. so my thought was, if a 4-fold growth in data moving around the Internet can't hold the comm boat, what happens to Intel's comm thrust when this Internet traffic slows down to a 3-fold growth? All that data moving around will need some storage, Intel talked about taking advantage of storage, but they didn't say exactly how they would cash in on this trend (I couldn't help but think of Exodus.)
I would like to see more discussion around margins and the impact on ASPs since the cellular business will become a larger part of Intel's business. The good news is the loss is decreasing, by I think they said 100M or 200M, which is great news, but since there's still a loss, I'd like to get an estimate on margins sometime from IDC.
Intel is number #1 in Ethernet Ctrls. They have indeed done a very good job there.
On the Telecom part, I would have expanded by a sentence on the carrier grade OS momentum comment. It's not always immediately understood what it means to need carrier grade OS.
On the acceleration of Internet traffic and migration to Ethernet, even in the face of the downturn, it is concrete proof that people are increasingly using the Internet as their way to communicate. Ethernet will rule. Voice to data will happen. The trend there is concrete.
About the acceleration from ASICs to network processors for a common platform, I want someone at Intel to do a reality check on their largest customer and make sure the timing of this assumption is okay with them. If it's not, it's plausible advancement of ASICs continues indirectly by that customer, so I'm wondering if revenue assumptions are based upon timing of transitions that may be quicker than what they really are? If there's a continuation of ASIC advancement, this is either because the transition to a common standards platform is happening maybe just a tad slower than expected, or because there's some niche market needing to be addressed. The former would be concerning, but the later wouldn't be.
The reference to DSP demo results (2X better performance than existing shipping solutions) was great to hear because it will help Intel work to earn a good reputation with DSPs.
Overall, I was very pleased with the nw comm reports, given the particularly challenging economy.
Best regards,
Amy J |
