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Intel's Sales Down, Current Gen of Products Weak 249

Posted by Zonk
from the ouch-indeed dept.
DoctorBit writes "According to an article in EETimes, Intel's processor sales dropped 52 percent this April as compared with April one year ago. Unit sales dropped 21 percent and prices dropped 40 percent. The article concludes with an industry analyst's assertion that 'Intel has obviously given up on making any money on their current generation of processors and has started a price war with AMD.' The San Jose Mercury News is reporting that Intel has just put several of its money-losing communications businesses up for sale and notes that 'it remains to be seen what Intel will do with its other money-losing businesses, Itanium microprocessors and flash memory chips.' The article quotes an industry analyst saying 'If you look at Intel today, it's hard to find a trace of the technology or the people that they spent more than $10 billion on.' Ouch."
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Intel's Sales Down, Current Gen of Products Weak

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  • by cnettel (836611) on Tuesday June 06, 2006 @01:34PM (#15481275)
    It's not just that their current gen is weaking, they are actively hyping a product that's coming in a few months. That marketing tactic might cause some buyers to delay in their AMD purchases, but it will surely hurt Intel sales more.

    OTOH, if Conroe really performs well, we might actually see the first big step upwards in performance for any mainstream desktop CPU in the last year or so.

  • Intel had it coming (Score:2, Informative)

    by alfs boner (963844) on Tuesday June 06, 2006 @01:43PM (#15481363) Homepage Journal
    They've been screwing over their customers for 15 years. With stuff like the spying serial number, tpa, etc, they've had an attitude of buy what we tell you or get lost. Not to mention price manipulation. They hold back each new iteration until prices slack off on the current product. AMD beat them to the 1 GHz punch because intel was holding back their own 1GHz chip to squeeze more profit. After AMD beat them, they released theirs 2 days later.

    Now that it's coming back to bite them on the ass, I think it's wonderful.

  • by Ancil (622971) on Tuesday June 06, 2006 @01:54PM (#15481464)
    What world are you talking about, precisely?

    Intel had profits last year of almost $8 billion versus a market cap of $106 billion.
    AMD had profits of about $370 million on a market cap of about $15 billion.

    That means Intel is giving about three times the return on investment.

    Oh, and their newest chip pretty much squashes everything on the market, including their own current "Extreme Edition" offerings.

    AMD has no viable laptop chips, while the Core Duo has been out for months. Did I mention that laptops account for the majority of new computers purchased? And that they're far more profitable that desktops?
  • Re:This will change (Score:1, Informative)

    by Anonymous Coward on Tuesday June 06, 2006 @01:58PM (#15481508)
    Now if only there would be some place where you could find an answer to your question. Maybe even the linked article.
  • by Quince alPillan (677281) on Tuesday June 06, 2006 @02:18PM (#15481682)

    Slashdot has been using the old Gnome logo for so long its becoming a running joke. They changed their logo in 2002. See the response from the Gnome foundation here. [slashdot.org]

  • by rabun_bike (905430) on Tuesday June 06, 2006 @02:23PM (#15481715)
    Intel designed the "ultimate" microprocessor - on paper. They might have been successfully in forcing every software company on the x86 instruction set to recompile but AMD saw the weakness in their strategy. Yes, x86 is weird, arcane, backwards, and messy. The instruction set is rooted in late 1960s and early 1970s computing. But, it would cost millions if not billions of dollars for the companies dependent on x86 designs to completely ditch the x86 architecture. AMD exploited this lack of foresight by Intel by offering a competing, well performing, backwards compatible chip to the Itanium.

    All this is great news for the consumer except that there is an economic law of 3's. We need a third competitor in the space to truly get good competition. We used to have Cirrus but they died several years ago. A couple of other companies that had a license to the x86 instruction set also did not make the transition. The PowerPC and dead DEC Alpha are not options either. Ideally, if we had a third chip manufacturer I think, based on economic theory, we would see some really interesting and innovate things take place in the chip market - beyond what we currently have. And, it would be much more likely to be sustainable.

    Using a backward compatible (and I mean x86 compatible) chip design is an easy decision for most technology companies. Option (a) spend millions migrating off the x86 to an even more proprietary Intel chip set or option (b) use AMD and operate on x86 as usual. Without a monopoly forcing option (a), option (b) was the clear winner. Intel has been forced to refocus their efforts and play "catch up" with AMD's new chip architecture and multi-core strategy. To make Intel's situation worse, AMD did some wonderful innovating on their. This helps no only AMD but all the programmers in the world that rely on the x86 architecture. Industry insiders are predicting the end of Moore's law. If you believe them then the free lunch is over. Chips are not going to operate at faster speeds. So, the only way to get more horsepower out of a machine would be to add more processors. But, most applications are written to run on single processor architecture. Most programmers know next to nothing about concurrent software design, testing, and development. AMDs chip pretends to be a single-processor machine while dividing tasks with multiple cores. Coding to true multi-processor systems is not only difficult but it is also not supported well in any language. For those that think C# and Java is the answer to concurrent programming, you might want to read what Herb Sutter has to say on the issue.

    http://www.gotw.ca/publications/concurrency-ddj.ht m [www.gotw.ca]
  • by Anonymous Coward on Tuesday June 06, 2006 @02:31PM (#15481795)
    "AMD has no viable laptop chips"

    Ever heard of the Turion 64 X2? So what if the Core Duo has been out for months? Does that mean that Nintendo and Sony should just pack it up because the Xbox 360 came out first?
  • by Channard (693317) on Tuesday June 06, 2006 @02:36PM (#15481848) Journal
    Working in a computer shop, I rarely get people asking for a specific processor. If anyone actually comes with a definite spec they'll say how much memory they want, how much hard disk and so forth. The actual CPU rarely comes up unless they're seriously into gaming. And everyone I've had come in looking for a Pentium doesn't know the difference between Pentium and Pentium D. They just know that Pentium is apparently a good thing to have, but don't know more than the word Pentium. If we had any Pentium 2s still kicking about I could probably sell them that and they'd nod 'Ooh, Pentium, yep, that's good' without being aware of the distinctions between the chips.
  • Flash will never go (Score:4, Informative)

    by FuzzyDaddy (584528) on Tuesday June 06, 2006 @02:39PM (#15481868) Journal
    Intel will always make flash memory. Flash provides an ideal platform for verifying a fab process and/or facility. The reason is that it consists of huge arrays of identical transistors in a grid, with a relatively small amount of additional circuitry. This makes it very easy to find and diagnose bad ones. It may not be a big business for them, and they may always lose money on it, but it remains an important part of keeping a handle on the process.

    A bad transistor (or contact or whatever) on a microprocessor can be very difficult to track down. Pass/fail testing is pretty good on them, but actually identifying the source of the failure can be really tricky and time consuming.

  • by joshv (13017) on Tuesday June 06, 2006 @02:45PM (#15481921)
    Note to the financially illiterate: Profits/Market Cap != return on investment.

    I could buy 100 shares of AMD at $30 for $3000 today. If the stock goes up to $40/share in a year and I sell, I've made $1000 for an investment of $3000. In the meantime, AMD might have actually lost money that year (yes, companies can lose money and still gain market cap). So in this scenario, even though AMD lost money, I as an owner of that stock, had a return on investment of 33% in one year.

    The numbers I'd be more interested in would be their margins. How much profit are they making per dollar they spend?
  • Not so modern. (Score:5, Informative)

    by LWATCDR (28044) on Tuesday June 06, 2006 @02:53PM (#15481988) Homepage Journal
    First the Centrino is not a CPU. It is a chip set. You are thinking of the PentiumM. Don't feel too bad Intel's marketing monster caused more than one person to think that the Centrino was a CPU.
    Second the PentiumM and the CoreDuo are a step back to the PentiumIII.
    Yea the Core Duo may be a new winner for Intel but it all seems to point to one thing. Intel is a one trick pony. Every time they try and replace the X86 line it turns out to be a total failure. The 432 was supposed to be the next big thing way back when. Then came the i860 CPU which Intel pushed as a Cray on a chip. Now we have the Itanium. At some point the X86 will just run out of steam. At that point Intel will be in major trouble.
  • by Anonymous Coward on Tuesday June 06, 2006 @02:53PM (#15481991)
    Since then, I haven't bought a Intel and been using AMD because I can get similiar performance for around a hundred-two hundred dollars less than an Intel. I always read the reviews, and watch the performance charts, then decide which is the better product for the $.
    Intel's processors these days are MUCH cheaper than an equivalent performance AMD chip. And the power consumption of the new C1 stepping 65nm Pentium Ds (900 series) is actually quite good. The past couple months have brought a lot of change to the price/performance landscape. The next generation of Intel chips is going to change the landscape even more. When Conroe is released, AnandTech is saying [anandtech.com] that you will be able to get a dual core Pentium D 805 for just $93.
  • Offtopic (Score:3, Informative)

    by tetabiate (55848) on Tuesday June 06, 2006 @03:06PM (#15482098)
    Reading Slashdot news has become a pain in the *ss after somebody decided to use the ugliest and smallest fonts available.
  • Re:Not so modern. (Score:2, Informative)

    by Anonymous Coward on Tuesday June 06, 2006 @03:34PM (#15482335)
    Grandparent may have been confused, but parent is far more so. Centrino is not a processor. Centrino is not a chipset. Centrino is a processor + chipset + wifi card. All 3 of them together is what makes a centrino sticket.
  • Re:Offtopic (Score:3, Informative)

    by 99BottlesOfBeerInMyF (813746) on Tuesday June 06, 2006 @03:58PM (#15482539)

    Reading Slashdot news has become a pain in the *ss after somebody decided to use the ugliest and smallest fonts available.

    It's a markup language, so fix it already. Specify your own CSS for the site, or just to always use +1 fonts sizes on this site. Another issue is that it looks like it uses a special style for IE to make up for the fact that IE breaks the font size conventions, so if you're using a decent browser, but identifying it as IE, you are probably getting smaller text than everyone else. That's what you get for lying.

  • Re:Offtopic (Score:2, Informative)

    by anaesthetica (596507) on Tuesday June 06, 2006 @04:20PM (#15482697) Homepage Journal
    Tahoma is an abomination of a font to begin with. The move away from a serif font for articles and comments was a huge mistake. Sans-serif is fine for headers, titles, and sidebar options. But for paragraphs of text meant to be read, 14px serif fonts designed for the screen are best (read: Georgia [microsoft.com] (also here [wikipedia.org] and here [will-harris.com]).

    Tahoma was made specifically for small-font-size menus and titles, not for large blocks of text (see here [microsoft.com]).

    Keep the left and right sidebars in small-size Tahoma, but please please please change the article and comment text to Georgia.

  • by Brian Stretch (5304) * on Tuesday June 06, 2006 @05:27PM (#15483186)
    Intel had profits last year of almost $8 billion versus a market cap of $106 billion.
    AMD had profits of about $370 million on a market cap of about $15 billion.


    Note which direction AMD's profits are going [yahoo.com]. Their stockholders' equity [yahoo.com] is growing very nicely too. Current assets are up, long-term debt is way down.

    Now look at Intel. Profits plummeted last quarter [yahoo.com]. Stockholders' equity [yahoo.com] is down, thanks to their cash balance plummeting from $11B to $5B over the past year.

    You can make Net Income say whatever you want it to say if management and their accountants have sufficient moral flexibility, but you can't fake cash. Intel's management has been looting the company via stock options, using massive share buybacks to mop up the share dilution that would have occured had the new shares created by the exercised options hit the open market. They've been robbing Intel shareholders blind, but now they're under so much pressure from AMD that they've admitted they'll have to cut back on the buybacks. No word on whether they'll cut back on the options abuse too.

    Folks, y'gotta read the financial statements. You have to understand the products. Why the Wall Street semiconductor analysts who get paid $megabucks per year can't seem to handle this is beyond me.

    Another thing: AMD's new 65nm CPUs ship in volume in Q4. In the unlikely event that Conroe really is all that, its advantage will be very short-lived. AMD's just not going to Osbourne their current sales by pointing that out.
  • Re:Not so modern. (Score:3, Informative)

    by LWATCDR (28044) on Tuesday June 06, 2006 @06:54PM (#15483796) Homepage Journal

    There is every reason to think that Intel wanted to replace the X86 with the Itanium. They said so when the Itanitum was first announced. The Itanium was going to be a family of chips and would be in everything from desktops to supercomputers. If you can find any press releases from that time you will find your proof.
    I don't think that Intel is stupid. Just too that they have been too successful. The PC is their bread and butter. If a chip doesn't run the current software stack faster it is dead on the PC. That is what killed the Itanium. That and for some reason they keep trying strange ISAs that require some magical super compiler to work well. That is what killed the i860 and has really hurt the Itanium.
    Many ISAs have been better then the X86. The Motorla 68k family, the Dec Alpha, and the PowerPC. Intel using the vast amount of money that it gets from the PC market has managed to make the X86 go faster than anyone imagined. What we have is a really fast pig of a CPU that is starved for registers and has more whacked out addressing modes than anything CPU in history.
    The X86-64 fixes some of the issues but only by tacking on yet another mode.
  • by Mr Z (6791) on Wednesday June 07, 2006 @12:45AM (#15485193) Homepage Journal

    Errr, no, it was not a "new idea at Intel." It was an idea that had been festering at HP for awhile under the moniker PA-WW [clemson.edu], and had acquired a thoroughly pervasive case of Kitchen Sink Syndrome. It ended up at Intel through a combination of factors, probably not the least of which was Intel's growing realization that x86 was getting hard to scale. (Intel may have been emboldened by the Mac 68K to PPC switch as well, given that had happened just before Intel joined forces w/ HP.) Thing is, when they took on EPIC in the early-to-mid 90s, I don't think they realized just how tall the ivory tower they were acquiring actually was.

    --Joe

Whenever a system becomes completely defined, some damn fool discovers something which either abolishes the system or expands it beyond recognition.

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