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Intel on the Outs? Intel on the Outs?
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Old 18th October 2004, 19:57   #1
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Default Intel on the Outs?

By Rich Duprey
October 18, 2004

In yet another devastating body blow to the company, Intel (Nasdaq: INTC) announced it would be canceling its 4-GHz Pentium chip. The semiconductor bellwether said it was switching gears, changing its focus from increasing microprocessor clock speed to a more ephemeral measurement of performance in multitasking, security, and multimedia.

Archrival Advanced Micro Devices (NYSE: AMD) had previously shifted its focus away from ever greater clock speeds in 2001, and Intel's decision ends 25 years of clock speed improvement that has seen the speed of its microprocessors increase by 750 times. It's a move Intel says it has been preparing for all along.

It might be more believable had not the company been touting the fact that it would be soon releasing a 4-GHz chip, or if it had not had similar miscues and changes of direction all year long. Fool contributor Tim Beyers has made a career this year of tracking Intel's missteps, mistakes, and flubs. Let's see:

At a time when AMD is hitting on all cylinders and gaining market share, Intel was announcing disappointing third-quarter numbers.
It delayed the introduction of a laptop computer chip.
A manufacturing flaw in one of its newest chipsets could cause computers to crash.
I could go on, but it becomes too painful after a point. The current announcement seems to recognize that it has finally reached a hurdle too high. When the Pentium 4 was released in February, Intel said it would release a 4-GHz version by year's end. That was then pushed back to March 2005 when it said it had concerns about meeting customer demand. Canceling the 4-GHz goal altogether is a realization that, as IBM (NYSE: IBM) has noted, sacrificing power efficiency for the sake of speed no longer makes sense. Undoubtedly, this puts an end to rumors of the 65-nanometer, 10-GHz "Nehalem" Pentium 8 chip.

To replace the chip, Intel will instead offer a 3.8-GHz chip with a twin billing of memory known as "cache." Cache stores frequently used data in a location that helps the computer access it faster, rather than having to search the main memory banks. But this is not without its own set of problems. The larger, dual-core chip may be more expensive to make, and it may not be able to sell them at an equivalent price.

It would, however, help Intel use its expanded capacity. Having spent some $20 billion on 90-nanometer and 300-millimeter chip designs over the last four years, it is faced with a weaker-than-expected PC market. The company has warned investors it will take an underutilization charge when it reports fourth-quarter earnings later this year. Yet the larger size requires Intel to produce more silicon wafers, thus spreading out the costs over a larger number of chips. It could help stabilize margins.

Without question, Intel is a giant struggling in a changing landscape. IBM and Sun Microsystems (Nasdaq: SUNW) already make dual-core chips; AMD has proven a formidable adversary; and even Texas Instruments (NYSE: TXN) holds sway in the mobile phone market.

http://www.fool.com/news/mft/2004/mf...ce=y&bounce2=y
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Old 18th October 2004, 20:05   #2
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Many people, myself included watching our 401K plan went down the drain in recent years. The dream of hard work and savings would return a decent retirement plan shattered with the so called high tech society. Carefully starred at Micrsoft; Intel; AMD; CISCO, etc stock peformance, you 'd be lucky to retain 10% of what you once had.

While all of this happened in the last few years when PC enthusiasts market has been "booming" along, enjoying the quest for speed/performance/games with new hardware reviews coming on an hourly basis; the entire industry has been bleeding internally. Big computer shows are shrinking in both size and participants.

Yet, the only winner seems to be Apple Computer in maintaining it's value. Too bad, we don't talk much about Apple.

Accordingly, the market today annonced over 30,000 job cuts in the High Tech industry, making it just over 118,000 job cuts year-to-day. This is only in the U.S. section excluding the down stream effect overseas. With a forecast in the next 3-5 years; "slow growth", it marks the end of an high tech boom.

Frankly, as an PC enthusiast I don't see the attraction in buying/investing the new Intel chip set; S775; DDR2 with no gain whatsoever to current Northwood; 875 chipset and DDR. I could care or less what the reviews are saying daily ..... all boils down to ZERO return in performance gain.

With PC aiming at the "pleasure" "no-business" apps; there is no long term benefit for investors in "cut-throat" pricings in the "mass-market".

Not too long ago (1979), I was using BasicA, writing "Time-phase Reorder point" using data file to drive production and purchasing requirements. The PC was slow; very slow. In the 90's, PC got faster and enthusiasts began writing programs for business apps covering manufacturing; accounting; CAD; CAM etc. PC industries enjoyed a huge boost; even hospitals began to implement PC in their daily operations. Today, gaming is the main drive in pushing sales carrying the "huge" overhead for the entire industry with sales unable to cover advertising costs.

It's about time we look at PC more than entertainment; rather a tool to make us more productive.
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Old 20th October 2004, 23:40   #3
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Okay, let's kick this dead horse one more time.

What if ..........

1) Intel lower the 3.4EE S478 pricing to say $300......
2) Intel lower the Xeon high end pricing to say $600......
3) Regroup and forget the Prescott entirely .... awake from a bad dream ......
4) Turn 64-bit on in Northwood.........
5) Stop telling the World it's wet dream .......
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Old 20th October 2004, 23:44   #4
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that would make them better then AMD , price/performance, but it's not going to happen...http://www.overclockers.com/tips00676/
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Old 20th October 2004, 23:56   #5
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Rather than losing Share Of Market, even thought the errosion is slow consistency will gain ground.

AMD Q3 earning is coming out Thursday; if it shows any "good" and with strong Q4 forecast including AMD gains on Notebook SOM (already reported) ..... Intel stock @~$21 level might remain while AMD @~$15 will exceed Intel in a matter of weeks.

Intel M is doing an about face trying to regain ground lately. What a time to watch such a development .... lucky me.
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