Wednesday, 14 October 2009

Intel - Cheap as Chips

(By Anthony Miller – Wednesday 14th October 2009 8:00am). No, I’m not talking about Intel's stock, which has actually had a pretty ‘mediocre’ run (‘only’ up 50% YTD) compared to, say, AMD (up 180% YTD).

I’m talking about the inexorable chip price erosion which will ever be a drag on Intel’s – indeed all chip-makers’ – revenues. “The average selling price (ASP) for microprocessors was slightly down sequentially”, is how it was phrased in yesterday’s Q3 results, which showed an 8% yoy revenue decline to $9.4b, though this was a 17% increase over Q2. Biggest increases (seq) were in Intel’s Mobility Group and Atom business, which is of course the smartphone and netbook markets. This is actually ‘bad news’ for PC manufacturers and resellers, signalling further retail price erosion as punters switch from notebooks to netbooks and other mobile internet devices.

According to Intel, Europe still appears to be lagging other markets, where "better than average seasonal patterns (were driven by) healthy back to school sales and inventory stocking in anticipation of a seasonally up fourth quarter”. This seemed to prompt the FT to opine that “The release of Windows 7 on October 22 is expected to boost enterprise chip sales further, as businesses upgrade their PCs for the new operating system.” Well, that would be a first, wouldn’t it! Surely nobody else realistically expects businesses to upgrade their PC inventory when Windows 7 arrives?

A straw poll of a few of my pals suggests they are keen to dispatch Vista in favour of Windows 7 on their home PCs – but that would be in lieu of replacing them. As we have said before, we have severe doubts that enterprises are about to start buying (fully priced) PCs and laptops again unless and until the ones they have are no longer fit for purpose.

No comments:

Post a Comment