Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Seagate Technology -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (7625)	4/14/2010 12:05:46 AM
From: Sam	Read Replies (1) \| Respond to of 7841

A few excerpts from INTC's CC that are relevant to PCs and servers: John Pitzer - Credit Suisse You talked about signs of corporate coming back. Is that just in the server business where you have had some strength for a couple of quarters now or are you starting to see it on the client side? Can you give us a bit more detail there. That would be helpful. Paul Otellini It is the first quarter where we have seen some real signs of PC purchases, corporate SKU’s picking back up again. Some of that was wrapped around our new products, the Arrandale notebook products, but some of that was also even just some of our older SKU’s that are classic running corporate SKU’s also picked up. To me that suggests the average fleet of notebooks is four years old out there. The average fleet of desktops is five years old. You are getting to the point where as CIO’s are feeling a bit better about their business it makes economic sense to swap these out just from an ongoing cost of ownership standpoint. --------------------------------------------------------------------------- Tim Luke - Barclays Capital Framing the environment you had several very quarters. A very strong fourth quarter and strong first quarter. You are now guiding for a slightly firmer than seasonal second calendar quarter off a pretty high base. Can you give us your sense of your visibility on that, slightly better than seasonal guide for the second calendar quarter and what elements are likely to contribute to that? Is it the PCs still that are leading? Is it the servers? Is it all of the above? Paul Otellini I think it is certainly PC driven but I think there are other things woven into it. We are still in the very steep part of the ramp on the 32nm. Bringing it into the product line there is still, as I said earlier, a lot of pull for that product. We were slightly behind quite frankly satisfying all the demand our customers wanted on 32nm in the first quarter even though we were producing much more than we first thought. We expect to catch up to that demand in the second quarter on 32nm over the course of the quarter. I think part of that is just the excitement around the new products on the PC side. Number one. ----------------------------------------------------------------------------- Kevin Cassidy – Thomas Weisel Partners Could you describe the mix in the servers? Was it a richer mix and just slower units? Paul Otellini In Q1 the mix is a little less rich than Q4. I think there are a couple of things going on there. First is what we saw a pickup in what we call the transactional business. This has tends to be unit processor servers on the Nehalem parts that are sold by both the channel and our OEM customers typically into a small and medium business environment. So I think that is a good sign we haven’t seen that kind of demand profile before in the transactional volume. Not in the last half of 2009. The fact that came back was one of the positive signs leading us to the guidance we gave for Q2. Kevin Cassidy – Thomas Weisel Partners You had mentioned corporate demand coming back on the client side. Do you see that as lagging from the server strength you saw in fourth quarter or are they not related? Paul Otellini I would like to think people are looking at these things with a clear economic eye. If you look at it with a clear economic eye you would refresh the servers first. That builds your infrastructure up. It gives you the fastest return on investment. You probably can squeak out another quarter or so with your PC fleet and I also think that corporations are likely to deploy Win7 so people have to qualify that and get the SKU’s ready and I think that is what is happening now. I don’t think it was really a lag effect. I tend to think of it as much more of a clear view of what the return on investment was versus the cost savings of replacing the PC that you are now seeing a bit more latitude on. ----------------------------------------------------------------------- James Covello - Goldman Sachs You have started off the year believing that we were looking at sort of a mid-teens PC kind of year. If I put any kind of close to normal seasonality in your revenue for the back half of the year you would be up well into the 20’s. It certainly doesn’t seem like you are out-shipping demand because there is no [wire] in the supply chain that is putting in inventory. Is it safe to say your expectations then for the full-year PC number have come up a bit? Paul Otellini I think so. Everyone still wonders what the shape of this year looks like. I said earlier when I ducked Tim’s question I would reserve judgment on that. I think versus a quarter ago how could we have not taken our expectations up a bit for the year?