Comments on: Intel’s Top Three Challenges http://www.thevarguy.com/2008/01/15/intels-top-three-challenges/ What's Next In the IT Channel Mon, 22 Mar 2010 05:24:09 +0000 http://wordpress.org/?v=abc hourly 1 By: The VAR Guy http://www.thevarguy.com/2008/01/15/intels-top-three-challenges/comment-page-1/#comment-59084 The VAR Guy Wed, 16 Jan 2008 04:32:04 +0000 http://www.thevarguy.com/2008/01/15/intels-top-three-challenges/#comment-59084 Mark G: Those are very solid points across the board. Hard to argue with you. In fact, The VAR Guy can't. But he stands by the three primary points in his blog entry: Microsoft's lame upgrade (Vista), cash-strapped consumers and virtualization are three core challenges to Intel's biz in 2008. Mark G: Those are very solid points across the board. Hard to argue with you. In fact, The VAR Guy can’t. But he stands by the three primary points in his blog entry: Microsoft’s lame upgrade (Vista), cash-strapped consumers and virtualization are three core challenges to Intel’s biz in 2008.

]]> By: Mark G http://www.thevarguy.com/2008/01/15/intels-top-three-challenges/comment-page-1/#comment-59081 Mark G Wed, 16 Jan 2008 03:39:54 +0000 http://www.thevarguy.com/2008/01/15/intels-top-three-challenges/#comment-59081 I think you missed the point. INTC's results weren't a reflection on economic or PC weakness. Rather, they are dealing with weak memory pricing and a few extrenuating circumstances. I'll elaborate: First, INTC stated that a variety of small factors, no one of which is particularly significant, conspire to produce a cautious outlook for Q1. Weak PC demand was NOT AMONG THEM: 1. NAND pricing will probably continue to weak. 2. The Marvell supply agreement started winding down during Q4 and will continue to do so in Q1. 3. NOR is now a part of their results and tends to have exacerbated seasonality Q4 to Q1. This is the first year where that will impact Q4 to Q1 seasonality. Of course, they also mentioned that economic indicators make it prudent to be a "little bit cautious". As for the PC business, notebook CPU growth DID slow down, but INTC explained that this was due to lower ASPs (due to strong proliferation of lower-priced notebooks in emerging markets) and the decline in the Marvell supply agreement. When discussing the overall PC environment, Stacy Smith's introductory statement was garbled, but it sounded like he said that the CPU business was "up-ly seasonal" in terms of unit volume expected in Q1. The rest of his statement was clear and consistent with an "up-ly seasonal" expectation: "We saw demand grow through the fourth quarter. We didn’t see anything unusual in terms of cancellations and we didn’t see anything unusual in terms of inventory building up. Our inventory is lower than I’d like. The disty channel inventory that we have visibility into is at the low end. So, it all felt pretty healthy through the fourth quarter." INTC went on to say that most industry analysts have PC unit volume "growing in the low double-digits in ‘08 over ‘07. That is an assumption, we wouldn’t argue with and that’s one that we’re building our capacity plans around." They also saw insignificant evidence of double-ordering in the quarter. Finally, server demand was "outstanding" in Q4: "The servers are building the infrastructure for the Internet and the enterprises and the notebooks are essentially becoming the clients to view those on. And the combination, we think, is very powerful and is not showing any signs of diminishing." I think you missed the point. INTC’s results weren’t a reflection on economic or PC weakness. Rather, they are dealing with weak memory pricing and a few extrenuating circumstances. I’ll elaborate:

First, INTC stated that a variety of small factors, no one of which is particularly significant, conspire to produce a cautious outlook for Q1. Weak PC demand was NOT AMONG THEM:

1. NAND pricing will probably continue to weak.
2. The Marvell supply agreement started winding down during Q4 and will continue to do so in Q1.
3. NOR is now a part of their results and tends to have exacerbated seasonality Q4 to Q1. This is the first year where that will impact Q4 to Q1 seasonality.

Of course, they also mentioned that economic indicators make it prudent to be a “little bit cautious”.

As for the PC business, notebook CPU growth DID slow down, but INTC explained that this was due to lower ASPs (due to strong proliferation of lower-priced notebooks in emerging markets) and the decline in the Marvell supply agreement. When discussing the overall PC environment, Stacy Smith’s introductory statement was garbled, but it sounded like he said that the CPU business was “up-ly seasonal” in terms of unit volume expected in Q1. The rest of his statement was clear and consistent with an “up-ly seasonal” expectation:

“We saw demand grow through the fourth quarter. We didn’t see anything unusual in terms of cancellations and we didn’t see anything unusual in terms of inventory building up. Our inventory is lower than I’d like. The disty channel inventory that we have visibility into is at the low end. So, it all felt pretty healthy through the fourth quarter.”

INTC went on to say that most industry analysts have PC unit volume “growing in the low double-digits in ‘08 over ‘07. That is an assumption, we wouldn’t argue with and that’s one that we’re building our capacity plans around.”

They also saw insignificant evidence of double-ordering in the quarter.

Finally, server demand was “outstanding” in Q4: “The servers are building the infrastructure for the Internet and the enterprises and the notebooks are essentially becoming the clients to view those on. And the combination, we think, is very powerful and is not showing any signs of diminishing.”

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