Intel, Apple provide bright spots in weak market
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While earnings reports from a few brand-name tech companies helped cushion financial worries and a weak start for trading in the new year, investor confidence still seemed shaky.
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(InfoWorld) - The leading quote from this weekâs news comes from Intel CEO Paul Otellini: "We're doing product refreshes every two years, which is the model we invented and then stopped doing after Pentium 4, shame on us," Otellini said. "We fell off it -- mea culpa, we screwed up -- and now we're back on that pace." Otellini was speaking at a Morgan Stanley Technology Conference, but regardless of the venue, every time a CEO speaks, he or she is using analysts and journalists as a conduit to shareholders. When a CEO takes a podium to apologize to shareholders, it tends to be the board of directorsâ idea. This is an obtuse, though profuse apology. The screwup to which Otellini refers is his decision to clear Intelâs shelves of x86 property and dump it on AMD in one drop so that Intel could end the year with a bang, having had the last volley in the CPU wars. It did that. But one could liken Intelâs strategy in latter 2006 to a massive spread of fireworks thatâs sent up simultaneously. Everybody goes nuts at the spectacle of it, but after that brief rush, all thatâs left is silence and smoke, soon followed by the glow of taillights. As tacky as it is to quote oneself, I put Otelliniâs present bind succinctly in a column I wrote last August: âIntel shot its entire wad on Core microarchitecture. From here, the only place Intel can go is bigger cache, more cores, and faster clocks.â Indeed, that sums up Intelâs plans for 2007, and thereâs no swaggering spin, distraction, or buzzword bending that can make up for the enormous technology gap between Core 2 and AMDâs reengineered Barcelona quad-core Opteron. It isnât likely that Intel can play engineering catch-up, given that Otellini has pink-slipped 10,500 workers. Otellini will have more than empty cupboards and empty desks to apologize for. He set a strategy to bulk up Intelâs manufacturing capacity and to jam up AMD by forcing prices down and leaving AMD unable to meet spiked market demand. Market demand is sagging, and if it returns, AMD has the capacity advantage: It has third-party foundries standing ready to stamp out AMD CPUs if need be. Another example of poor judgment is Otelliniâs fixation on CPUs and chip sets. AMDâs acquisition of ATI put Intelâs rival in the high-margin peripherals business as well as a growing role in high-performance chip sets for Intel desktop and notebook PCs. Intelâs hostile attitude toward chip-set makers drove graphics and chip-set giant Nvidia to make surprisingly close ties with AMD despite its purchase of Nvidiaâs sole competitor. If only it ended there. Recently, Intel informed the Delaware Federal District Court that it cannot produce relevant e-mail messages that were exchanged after the filing date of AMDâs antitrust suit. Intelâs letter to the court blames individual human error while heaping detailed praise on executivesâ document retention plan. Buried in the text is the Nixonian counterpoint, âSome of the tapes appear to have been recycled.â Itâs not that Otellini hasnât done anything right. He did put the brakes on NetBurst. He won an exclusive with Apple and got Sun Microsystems to add Intel to its product line. But in the minus column, Otellini lost the companyâs gold medal exclusive PC maker, Dell, and people will wonder whose inboxes those recycled tapes might have contained. Intelâs CEO should be gilding his parachute. If he lasts out the year, it will be because Intelâs board wisely takes its time to choose a replacement. My litmus test? Find someone who believes that Intelâs yearly sponsorship of the A. M. Turing Award matters more than convincing a judge in Delaware that evidence really, truly got lost. And find a CEO who, when he or she apologizes for lousy decisions, uses the pronouns âIâ and âme.â
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BusinessWeek Online - For 35 years, Advanced Micro Devices Inc.  stood in the shadow of archrival Intel Corp.  AMD churned out lower-priced clones of the tech leader's chips and occasionally enjoyed a hit that helped boost its meager profits. But bad times easily outweighed the good. Again and again, Intel used its manufacturing muscle and pricing power to stymie AMD's ambitions, preventing it from gaining a foothold in lucrative markets such as servers and corporate PCs.
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Intel Corp.&#39;s (INTC.O: Quote, Profile, Research) upcoming mid-quarter report will be closely watched for signs of weak back-to-school computer sales, though recent
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Pressure on to get 'Barcelona' out Intel has recaptured all the market share it lost to AMD last year during the two rival chip makers' battle for supremacy in the Windows workstation arena, the latest market stats show.â¦
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Intel'sÂ deal with STMicroelectronics to create a new semiconductor company was a hit this week with IT investors, who continue to reward bold merger and acquisition moves in hard-fought tech markets like chips and Internet services. Rumors of aÂ Salesforce.com hook up with GoogleÂ andÂ Yahoo's continuing search for Web 2.0 companiesÂ also are stoking investor interest.
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In an era when most technology outfits have tightened their belts to adapt to a slower-growing market, one company stands out for forging ahead on innovation: Apple Computer (AAPL ). Others have slashed R&amp;D
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Faced with weak demand for PCs and technical limits on the speed of its products, Intel is betting on a future in which every chip it makes contains what amounts to two computers.
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U.S. blue chips opened lower on  Thursday, while tech shares were headed higher after Apple  Computer Inc. AAPL.O posted stellar financial results after  Wednesday's session.
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Apple earnings were very strong during its first fiscal quarter, but it disappointed financial analysts with its second quarter guidance amid a nervous stock market, and iPod sales were lower than expected.
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Strong demand from emerging markets and the introduction of more low-cost laptops will boost Intel&#39;s sales in Asia during 2008, but company executives are keeping a close eye on the U.S. economy for signs of a slowdown.&quot;Overall, I&#39;m optimistic about growth in Asia, but it would be imprudent not to be cautious and mindful of the economic situation in the U.S.,&quot; said Navin Shenoy, general manager of Intel&#39;s Asia-Pacific operations, during a telephone interview.Intel&#39;s Asia-Pacific sales include chips sold for use in Asia as well as products that are built into computers for export to other regions. As a result, regional executives are closely watching what happens in the U.S., where concerns are mounting that the economy is headed for a recession.&quot;The export business that&#39;s dependent on the United States might see a bit of a slowdown, but the bulk of the growth is coming from [Asian] consumption. The consumption that we see across Asia-Pacific is quite strong and I see no impact or slowdown there whatsoever at this point in time,&quot; Shenoy said.&quot;But we&#39;re going to watch it. We&#39;re going to watch it carefully,&quot; he said.Analyst firm IDC expects Asian PC shipments to grow 16.7 percent this year, compared to an increase of 3 percent in the U.S.&quot;We&#39;ve pretty much been assuming no major impact [on PC demand] from the subprime crisis in the U.S.,&quot; said Bryan Ma, director of personal systems research at IDC Asia-Pacific, adding that the market research firm is monitoring economic developments in the U.S.Intel is coming off a strong fourth quarter, despite being squeezed somewhat by lower-than-expected flash memory prices. Strong processor demand during the period helped push Intel&#39;s Asia-Pacific revenue to US$5.3 billion, a quarterly record and about half of the company&#39;s total sales.&quot;Demand on the CPU side was strong. We set a record in terms of CPU shipments [and] we set a record for chipsets,&quot; Shenoy said.Most of Intel&#39;s processor revenue during the period came from 65-nanometer chips. The first chips from Intel&#39;s 45-nanometer processor lineup, called Penryn, were introduced in November and made a &quot;nominal&quot; contribution to Asia-Pacific revenue during the fourth quarter, Shenoy said.That contribution will increase rapidly over the next several months, with Intel&#39;s shipments of 45-nanometer processors to surpass those of 65-nanometer chips during the third quarter, he said.Two upcoming Intel products, Silverthorne and Canmore, should also make their presence felt in Asia this year, Shenoy said.Silverthorne, which is produced using the same 45-nanometer manufacturing process, is the first chip designed by Intel to be used in low-cost laptops and will be available during the second half of the year. Currently, Intel offers a version of its aging Celeron M processor for these types of machines, such as Asustek&#39;s popular Eee PC.Silverthorne, which is intended to be inexpensive and easy on battery life, will appear in low-cost notebooks that should spur faster growth in Asian demand for mobile computers, Shenoy said.The other chip that Intel expects to see do well in Asia is Canmore, a system-on-chip announced during the Consumer Electronics Show that combines a processor with graphics and high-definition video capabilities. Designed for set-top boxes and other consumer electronics, Canmore is due during the second half of this year.&quot;There are tremendous opportunities for a product like that in countries like Taiwan and Korea,&quot; Shenoy said.One technology that isn&#39;t expected to make much headway in Asia this year is WiMax.Apart from South Korea, where WiMax is already in commercial use, the wireless broadband technology hasn&#39;t caught on much in Asia. As a result, WiMax products will not see widespread adoption in the region until 2009, Shenoy said.
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With a few strong years of market gains and product reviews, AMD isn't about to rest on its laurels.
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A sell-off in tech stocks following Intel Corp&#39;s disappointing outlook pushed Asian shares lower yesterday, overpowering pockets of strength in some financial, consumer and industrial issues.
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AMD and Intel processor road maps for 2007 show both companies are on the move to address these issues.
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Apple iPod rival and flash memory maker SanDisk, is "far less dependent" on the United States than it was two years ago when it comes to its sales and, in fact, a the weak U.S. dollar helps the performance of SanDisk, which competes with semiconductor makers Intel and Micron Technology.
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With stronger profits to report, Intel's looking forward to this week. Struggling AMD, on the other hand, will hope it goes by quickly.
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The tech sector continues to sit on unstable ground, with Intel Corp. lowering its forecast due to lagging consumer demand for technology products and fueling investor buzz of weakness in the sector.-washingtonpost.com