Santa Clara (CA) - Intel Q1 earnings result met the expectations of investor, but lower processor, chipset and flash memory sales brought the first substantial revenue and profit decline in several quarters. Reported revenues were $8.9 billion, 32% below the first quarter of 2005; profit dipped 38% in the same time frame.
Chief executive officer said that Intel was confronted with "moderating PC growth" over the past few quarters. He blamed slower chip-level inventory reductions for Intel's lower sales. Media and industry sources speculated that Intel may also have lost more market segment shares to AMD in several markets, including the higher-margin server segment.
Overall, Intel reported lower unit sales for its processors. Average selling prices were also lower as a result of the increased competition with AMD which forced Intel to lower the prices for its chips during the quarter. Additionally, Intel reported lower chipset, motherboard and flash sales as well as a declining amount of application processor shipments.
On a positive note, the transition to a 65 nm process appears to be advancing smoothly, as the company was able to ship millions of 65nm dual-core processors. Intel saw "strong acceptance" of the Centrino Duo mobile platform as well as the Viiv platform, Otellini said. The executive confirmed that the firm's new Core microarchitecture will be launching in the third quarter of this year.
According to information released earlier this year, Intel will be launching first the Woodcrest server chip (Xeon 5100 series) to compete with AMD's Opteron. The desktop chip Conroe (Core Duo E4000 and E6000 series) will be following shortly thereafter. The mobile Merom processor (Core Duo T5000 and T7000 series), which represents the foundation of the Core architecture may launch in Q4 of this year.
Related article:
I told everyone this Conroe thing would bled Intel because of ASP and the next day Tom posts a story about Intel losing OODLES of money.
Santa Clara (CA) - Intel Q1 earnings result met the expectations of investor, but lower processor, chipset and flash memory sales brought the first substantial revenue and profit decline in several quarters. Reported revenues were $8.9 billion, 32% below the first quarter of 2005; profit dipped 38% in the same time frame.
Chief executive officer said that Intel was confronted with "moderating PC growth" over the past few quarters. He blamed slower chip-level inventory reductions for Intel's lower sales. Media and industry sources speculated that Intel may also have lost more market segment shares to AMD in several markets, including the higher-margin server segment.
Overall, Intel reported lower unit sales for its processors. Average selling prices were also lower as a result of the increased competition with AMD which forced Intel to lower the prices for its chips during the quarter. Additionally, Intel reported lower chipset, motherboard and flash sales as well as a declining amount of application processor shipments.
On a positive note, the transition to a 65 nm process appears to be advancing smoothly, as the company was able to ship millions of 65nm dual-core processors. Intel saw "strong acceptance" of the Centrino Duo mobile platform as well as the Viiv platform, Otellini said. The executive confirmed that the firm's new Core microarchitecture will be launching in the third quarter of this year.
According to information released earlier this year, Intel will be launching first the Woodcrest server chip (Xeon 5100 series) to compete with AMD's Opteron. The desktop chip Conroe (Core Duo E4000 and E6000 series) will be following shortly thereafter. The mobile Merom processor (Core Duo T5000 and T7000 series), which represents the foundation of the Core architecture may launch in Q4 of this year.
Related article:
I told everyone this Conroe thing would bled Intel because of ASP and the next day Tom posts a story about Intel losing OODLES of money.
Take that fanboys!!!!
LOL! you're a funny man! Actually the only thing intel lost was some market share. They acually did post a profit of 1.35 billion dollars for the quarter on 8.94 billion dollars of revenue. Not as good as the same quarter last year, but still quite profitable.
Now let me put this into perspective for you. I just looked at AMD's first quarter earnings and for your information, Intel's profit of 1.35 billion was 20 million dollars more than AMD's total revenue of 1.33 billion for the first quarter.
You have to take this to scale. Intel is so much larger than AMD that they can easily temporarly slash prices in order to dump product. (especially when preparing to roll out a new product line) For example: according to 2006 1st quarter Intel posts 8.9 billion in revenue(AMD must be stomping them huh?) with operating income of 1.7 billion leaving net income of 1.3 billion. This is compared to AMD with 1.332 billion in revenue (14% of Intel's) with operating income of 259 million leaving net income of 185 million (again 14% of Intel) Intels net income is roughly equal to AMD's entire revenue! Intel's net income is 14.6% of their revenue while AMD's net income is is 13.8% of their revenue. So it seems that Intel is similar to AMD in the financial sense only on a vastly larger scale.
I actually post this on BaronMatrix's other thread but it seems appropriate here.
Edit: I didn't scroll down far enough and it looks like gr8Mikey beat me to it.
You have to take this to scale. Intel is so much larger than AMD that they can easily temporarly slash prices in order to dump product. (especially when preparing to roll out a new product line) For example: according to 2006 1st quarter Intel posts 8.9 billion in revenue(AMD must be stomping them huh?) with operating income of 1.7 billion leaving net income of 1.3 billion. This is compared to AMD with 1.332 billion in revenue (14% of Intel's) with operating income of 259 million leaving net income of 185 million (again 14% of Intel) Intels net income is roughly equal to AMD's entire revenue! Intel's net income is 14.6% of their revenue while AMD's net income is is 13.8% of their revenue. So it seems that Intel is similar to AMD in the financial sense only on a vastly larger scale.
I actually post this on BaronMatrix's other thread but it seems appropriate here.
Edit: I didn't scroll down far enough and it looks like gr8Mikey beat me to it.
I am not arguing size, I'm saying that this is a bad harbinger in my book. Why is AMD selling MORE? We'll see what happens but in my mind the Conroe is shooting themselves in the foot.
You have to take this to scale. Intel is so much larger than AMD that they can easily temporarly slash prices in order to dump product. (especially when preparing to roll out a new product line) For example: according to 2006 1st quarter Intel posts 8.9 billion in revenue(AMD must be stomping them huh?) with operating income of 1.7 billion leaving net income of 1.3 billion. This is compared to AMD with 1.332 billion in revenue (14% of Intel's) with operating income of 259 million leaving net income of 185 million (again 14% of Intel) Intels net income is roughly equal to AMD's entire revenue! Intel's net income is 14.6% of their revenue while AMD's net income is is 13.8% of their revenue. So it seems that Intel is similar to AMD in the financial sense only on a vastly larger scale.
I actually post this on BaronMatrix's other thread but it seems appropriate here.
Edit: I didn't scroll down far enough and it looks like gr8Mikey beat me to it.
Well--first of all, I am not truly a fanboy either way. I will say that Intel is losing control of the processor market. At this rate and if this trend continues, Intel is in alot of trouble. Remember that the new chips are coming out in Q4 as well, meaning that there are two more quarters before Intel has a leg to stand on (IMHO). It is a bad thing for Intel--the Q1 results, that is. This is a profit, yes, but it is quite a slump from the normal trend. Even if they make $40 trillion every day, slumping down to only $28 trillion a day will seriously affect their business. They are used to living large but now have to tone it down a notch from the giant they were before.
Intel commited corporate suicide with the release of conroe benchmarks early.
Oh? How so? Would you care to elaborate? Certainly when intel released the benchmark scores people said wow look at that intel's future offerings are gonna be better than amd's and since amd is good now i think i'll stop buying intel p4's until their next generation is released but i will still buy their mobile products. Happy these are not my words just the ones of the average consumer
I am not arguing size, I'm saying that this is a bad harbinger in my book. Why is AMD selling MORE? We'll see what happens but in my mind the Conroe is shooting themselves in the foot.
Gotta go now. See ya when I get home.
Go ask any 10 people on the street what conroe and AM2 are. I'll guarantee you that they won't have a clue what you are talking about. And guess what? these people will probably be very representative of your average home computer user. They don't have a clue what a cpu does or know the least little thing about how it works. As far as they can tell, its magic.
What these people do understand is when Dell sends the brochure in the mail advertising a complete computer with a flat panel monitor for $499 its a great deal and they buy it.
If your theory is that nobody will buy intel due to the early benchmarks, what makes you think that they will buy AMD (at least 20% inferior) either?
Chipsets??? Intel sells several things other than cpus...
True. But most of their chipset accompany their cpu's. How many companies in how many industries can hope to have the kind of marketshare and profits that Intel is currently pulling? The problem is that Intel has operated for years in practically a monopolistic market. Now that AMD is giving them some real competition it only makes sense that they will lose some marketshare/profits. Intel is trying to keep marketshare while AMD is still growing. Any time you've got a HUGE company that dominates a market you will always have smaller and more agile companies eating away at profits.
Intel commited corporate suicide with the release of conroe benchmarks early.
Oh? How so? Would you care to elaborate? Certainly when intel released the benchmark scores people said wow look at that intel's future offerings are gonna be better than amd's and since amd is good now i think i'll stop buying intel p4's until their next generation is released but i will still buy their mobile products. Happy these are not my words just the ones of the average consumer
How many P4's do you think the average consumer buys? I would say the average consumer buys one computer every 4 - 5 years. And I think you are giving the average consumer a little too much credit.
Average consumer shops almost exclusively by price and possible computer brand name. Most could care less whats actually inside the case - so long as it does what they need it to do.
Intel commited corporate suicide with the release of conroe benchmarks early.
Oh? How so? Would you care to elaborate? Certainly when intel released the benchmark scores people said wow look at that intel's future offerings are gonna be better than amd's and since amd is good now i think i'll stop buying intel p4's until their next generation is released but i will still buy their mobile products. Happy these are not my words just the ones of the average consumer
How many P4's do you think the average consumer buys? I would say the average consumer buys one computer every 4 - 5 years. And I think you are giving the average consumer a little too much credit.
Average consumer shops almost exclusively by price and possible computer brand name. Most could care less whats actually inside the case - so long as it does what they need it to do.
I realise you just mis-spoke but I found it quite funny...Pentium 4's have only been available for 4 or 5 years. That kinda means consumers only own one P4 system...
How come nobody Made a movie on this FX-62 Vs Conroe Fiasco.
I mean come on The guy made a movie on "Super size me" and "trekkies" and so much other mockumentrys and documentrys
I mean come on someone that reads this please get your cameras or HDDVD recorders out and go around to some of the biggest fan boys on Conroe and the biggest fan boys for FX-62 and go interview them and maybe get a few INTEL and AMD people. It would be a great movie lols i would watch because we're spending half our life on these fourms hashing it out each other and this concerns a multi-billion dollar profit for both companys and we're the Geeks and nerds that are hashing each other for which is going to break INTEL or make it. or Break AMD or Keep on making it.
I seriously think there should be a movie on this, i can't do much about this because i'm up here in Canada but You Americans can think about it. there are almost 1Billion computerusers and about 10% are enthuasists and 10% of the 10% are people like us So there is a great Idea pitch there will still be about 2-3 million potential viewers of this movie.
Sorry for going off topic but i think this issue deserves to be filmed
i sure would go and watch it or download it atleast
any one think its s good enough post i'll create a thread on this topic lols even if its not exactly on topic but this relates to CPUs in a BIG Way
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