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Monday, April 09, 2007

Enter The Titans: AMD Smacked By Intel

Intel did not see AMD coming, Intel got hit last year. The pendulum has swung. AMD did not see Intel coming in the second round, which is now. This clash of the titans has generated quite some flurry, and is a harbinger of things to come in the larger industry: prices on chips are going down. The consumer wins. The market corrects itself. AMD swung into action. Cost cutting is on the block. The market rewarded AMD for it. Its stock price actually went up on the bad news of lower than projected revenue.

This is the market in action. It is dazzling to watch.

A big company can stay crisp, like Intel has in this case. The small company can be agile, nimble, reflexive, smart, but it serves to be wise. Be ready for the big leagues if you decide to hit. Prepare. Plan. Take the plunge.

This is warfare. This is an ecosystem. Some animals are food.

AMD's cost cutting is not to be in its innovation efforts, so I am sure there will be another round. AMD will swing back perhaps.

If prices on chips go down, you are looking at cheaper PCs. Cheap PCs are a good to great idea.

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In The News

Intel Introduces New Quad-Core Xeons CIO Today the L5320 and L5310 require as much as 60 percent less power than the company's existing 80-watt and 120-watt quad-core server products. ...... The L5320, at 1.86 GHz, and the L5310, at 1.60 GHz, both feature 8 MB of Level 2 cache and can run over a 1,066-MHz front side bus. ..... greater performance and a "dramatic reduction in power consumption" ...... "power and heat becomes a real infrastructure problem -- not just a problem for the I.T. guys, but for the building managers." ..... the lower-powered Xeons are expected to be available worldwide in new servers from Hewlett-Packard, Dell, Fujitsu Siemens, Verari, Samsung, Wipro, Acer, HCL, Digital Henge, and IBM, as well as the announced servers from Rackable Systems.
IDC Report: Virtualization Cannibalizes Server Sales IDC predicted that server and component vendors will rally around quad-core technology, then move ahead to octi-core chips.
Blu-ray Promoter Foresees Victory in DVD Format Battle "Within three years it will just be Blu-ray." ... Blu-ray's will completely replace the widely popular current DVD standard by 2010. .... the videotape battle between VHS and Betamax. Sony lost that battle, but is having much greater success with Blu-ray. ..... In mid-February, when the Oscar-winning film "The Departed" was released in both formats, the Blu-ray version sold 20,000 copies to the HD DVD's 13,000.
AMD forced into cutbacks as it falls prey to Intel's cheaper chips Independent
AMD lowers revenue outlook CNNMoney.com
AMD cuts forecast; to slash costs MarketWatch
AMD plans overhaul after disappointing first quarter performance Canada.com, Canada
AMD pays the price for awakening Intel Goliath EETimes.com Advanced Micro Devices is paying the price of moving from the sidelines to front and center on Intel's radar. ..... a two-pronged attack by Intel, including strong products and price cuts ...... lower average selling prices and unit sales ..... no mention of a reduction in research and development ...... Through most of last year, AMD grabbed market share from Intel by selling a higher-performing server chip that took the larger rival off guard. Drawn by its better price-performance ratio, companies couldn't get enough of the Opteron, which was key to AMD soaring to eighth place in the microprocessor market last year from 15th in 2005 ......... "Intel was ignoring AMD for a long time, and they paid the price" ....... Intel came back strong, cutting prices and closing the performance gap with Core 2 Duo chips for desktops and notebooks, and its Xeon 5100 series for servers. ...... should lead to lower prices for servers and PCs. .....AMD has outsourced more manufacturing from Chartered Semiconductors ......... Microsoft's new Windows operating system isn't expected to significantly boost PC sales ...... AMD's plan to integrate graphics and core processors in one chip is expected to simplify notebook motherboards, which should lower the price of the hardware ...... scheduled to ship in 2009 ..... "They were caught a little bit off guard by Intel. I don't think AMD expected them to be as effective as they are." ...... AMD no longer has a technical advantage. ..... "They have to prove that they can take Intel head on, while Intel is looking at them."
AMD Restructuring After 1Q Revenue Miss Houston Chronicle, TX
Advanced Micro's Sales Fall 8%, Less Than Anticipated (Update5) Bloomberg
AMD's Perfect Storm Spooner The first quarter of 2006 represents the high water mark for AMD and ATI’s combined revenue for the last eight quarters ..... Intel is on the upswing with an improved product line that has increased its ability to compete and win business from AMD. ...... AMD’s purchase of ATI has created some uncertainty around its graphics processors and chipsets product line. ..... an overall slowdown in brand-name desktop PC sales ...... competition between Intel and AMD will remain intense throughout 2007. ...... its ability to begin an on-time transition to 45-nanometer production. ..... any delay in its transition to 45nm, which is scheduled to begin at mid-2008, will hurt AMD’s long-term capability to compete with Intel.
AMD Gives Us A Tech Reality Check GigaOm The demand for devices – from PCs to wireless phones to everything is heading south - fast. ..... the demand has been lagging in most high-end volume markets - PC’s, wireless handsets and most categories of consumer electronics. .... The good news is that this is market self correcting itself, and instead of a Bust 2.0, we might have a slow correction in the technology ecosystem.
AMD's Pain, Investors' Gain BusinessWeek Chalk investors' positive reaction up to aggressive cost cutting. .... curtailing its spending to weather a fierce onslaught from giant Intel ..... With less money coming into the company, AMD said it will revise its business model. ..... AMD's stock price has plummeted by about 60% during the past year, a $9 billion drop in market value that has underscored concerns about the company's ability to withstand the pricing pressure from the much-larger Intel. ........ Blogger Om Malik called the AMD announcement a "tech reality check"

AMD sees revenue coming up short, plans overhaul Globe and Mail, Canada AMD's shares gained 3.5 per cent to $13.30 in early trading while larger rival Intel Corp. rose 1.6 per cent to $19.89. .... a bruising price war with Intel that has eroded profits for both companies
AMD to miss market expectations Toronto Star, Canada
AMD will restructure business after earnings drop Computerworld, MA
AMD Sales Battered By Intel Red Herring, CA Advanced Micro Devices, the world’s second-largest maker of personal computer processors, said revenue declined 8 percent in the first quarter amid a pricing battle with larger rival Intel. .... The drop in revenue wasn’t as big as some investors anticipated, sending the shares higher. .... Intel has superior products and it is pricing them “aggressively,” putting pressure on Advanced Micro’s sales and profitability
AMD sees revenue below view, plans overhaul Canada.com, Canada
AMD sees revenue below Wall Street view CNET News.com, CA plans to reduce 2007 capital expenditures by about $500 million, cut discretionary expenses and limit hiring to critical positions.
AMD sees revenue below view, plans overhaul Washington Post, DC evidence that a price war between AMD and Intel is continuing ..... "We expect to see evidence of a decline in prices across the board, and that's likely to hurt both AMD and Intel." ..... hopes that AMD's moves would help reduce excess capacity in the industry .... the second quarter in a row that AMD has shown signs of trouble in the price war that has eroded profits for it and Intel in the $30 billion processor industry.
AMD, Intel shares rise Reuters.uk, UK

Friday, April 06, 2007

A Web 3.0 Manifesto

6 April