Thursday, April 27, 2006

Analysts lash out at Intel CEO

Paul Otellini, Intel CEO, claims that Intel lost market share not because of AMD's superiority, but because of Intel's chipset shortages.

Needham's Charlie Glavin doesn't buy this cheap excuse:

"Baloney. I was hearing from the guys who will be buying the chips for the (computer) boxes. They said on a performance basis that AMD's products are better".

Prudential's Mark Lupacis shares a similar view. In a research report, Lupacis dismisses most of Intel's stated goals as wishful thinking. Specifically, Lupacis considers Intel's expectation to grow revenue by 18% in 2H06 "unrealistic", and Intel's gross margin will be negatively impacted by additional costs and larger die sizes. Moreover, Lupacis has discredited Intel's notion that it lost market share only because of chipset shortage.

Lupacis points out that history can't be used as guide, he reckons:

"AMD is clearly a different animal than it was 5 or 10 years ago. The company is no longer limited by capacity and only focused on supplying the low-end of the desktop market. AMD's portfolio is broad, arguably superior in the server and desktop markets, and for the first time ever,competitive in the notebook area.

...For years, the MPU was the gating factor in PC performance, and Intel’s manufacturing muscle focused solely on the MPU led to its market dominance.Today, it is not just the MPU, but how efficiently it interacts with peripheral chips like DRAM. As a result, we think that the market has shifted from a manufacturing driven one to an innovation driven one.Considering that AMD was the first with 64-bit memory addressing in the desktop, the first with a true dual-core product, and the first with an integrated memory controller hub, it appears that AMD is beating Intel to the innovation punch. Intel’s massive manufacturing muscle, on which it leaned so heavily in the past, is not as big of a differentiator anymore.
...
By early‘07, we expect AMD will have a true quad core solution for both the desktop and server markets, which will look a lot better than Intel's solutions, two dual core chips glued together in a single package. In addition, we expect AMD's lower-cost Turion notebook MPU to continue to gain share for the next several quarters and anticipate a new mobile architecture from AMD in mid-07 that will test Intel's dominance at the high end of the notebook market."

Lupacis expects INTEL to continue losing market share to AMD, leading to a duopoly where AMD controls 30-40% market share. Lupacis rates INTC at underweight with a target price of $15, based on projected 2007 EPS of $0.96.

8 Comments:

Anonymous Anonymous said...

from that attitude, i can already foresee another intel's failure coming up..

6:17 PM, April 27, 2006  
Anonymous Anonymous said...

Intel is betting a whole future on Core architecture. If the chip performance is lower than "previewed" by Anand, Intel will loose another 15-20% of the market in 18 months. The only area where AMD is not pushing enough hard in my opinion is mobile.
Turion X2 should arrive months ago to reduce Intel attitude with Centrino brand. Q1 is a dissapointment - AMD64 line is a clear winner and only 1% of the marketshare is a miserable gain.

12:41 AM, April 28, 2006  
Anonymous Anonymous said...

paul should really be fired on the spot. saying intel's market share lost due to inadequate chipset supply is just like saying "GM lost market share to Toyota not because Toyota makes more efficient cars, but because of inadequate supply of engines"

1:19 AM, April 28, 2006  
Anonymous Anonymous said...

I think the party is over for Intel..
it lasted for like 20 years ...One cannot continue to make 70% gross margins unless it is a "monopoly". No wonder Intel went out to extreme measures to ensure that.

7:50 AM, April 28, 2006  
Anonymous Anonymous said...

Look here, It looks like Intel is in panic this time:
The Inquirer has published slides from Intel presentation where
2.4 Opteron is slower than 3.0 Woodcrest. Look
here
The clock difference is 25%, the performance gain is about 22%. It means that 3GHz Opteron with DDR1 still faster than 3GHz Woodcrest!
So AM2 and new Opterons can WIN against NGMA.
Paul should start looking for a new job...

8:24 AM, April 28, 2006  
Anonymous Anonymous said...

Intel's chipset supply was arguably constrained. Our firm lost a lot of business due to no chipsets. We didn't take them to AMD because our corporate client WILL NOT BUY AMD DESKTOPS although they are comfortable with servers based on Opteron. The lack of Intel chipsets and motherboards led to lost sales on our part and since our custoemrs are very loyal, reduced sales since they didn't go elsewhere, they just waited.

9:13 AM, April 28, 2006  
Anonymous Anonymous said...

OK Folks I've seen enough intel bashing out here. For all you HT lovers CSI is all well and kicking we are on course to launching our first dual core CSI product Q2 2007 and then from there the scalability is endless and HT goes down the drain. Now I am not done the platform supports CSI and FBDIMMS and the integrated memory controllers good enough to take down an AMD piece of junk eyes hut.

For all you wishful thinkers who thought there wasnt a CSI solution before Nehalem I am extremely sorry.

The emperor strikes back with vengance

9:32 PM, April 30, 2006  
Blogger anonymous said...

I quit using Intel products as much as I could years ago. My small business has 8 computers, all AMD. I did so for 2 reasons:
1. I used to be privy to Intel's marketing approach to small business. They literally forced those customers to take product or lose customer status. They also forced those customers to remain exclusively Intel. They have illegally limited competition for years. I have no respect for Intel and cannot support their business ethics in any manner. Otellini is just more of the same.
2. AMD’s products have always been better value. They have worked hard at executing well. It is the American way. They now have better products. Competition is good for us all. We have real choices now.

8:05 AM, June 29, 2006  

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