P4 Breaks Down Old Ties

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By Sharps97
January 2, 2002

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Amen, processors are last decade's fight, which BTW, was won by Intel in the very early 90s.

I find it, ... interesting... now that AMD is picking at Intel's primary market, that it is no longer "important", last decade's fight as you will. Imagine that, Intel's core competency, that which is responsible for 90%+ of the companies revenues, is "old hat". Amusing might be a better word.

With a comparable processor AMD cannot do a whole lot more than stick around while Intel dictates its profitability.

Same old story, just arriving at 20% market share is not enough to keep profits in a recession, and with Intel's own profits down 90%, they weren't doing much dictating themselves, the market was.

The key is reputation, and Intel is running through it like Cap Ex. With a comparable product, AMD made money when you would expect a company to make money- in a healthy market. They gained share. In a bad market, they lost some money, but importantly, they maintained market share despite Intel's best pressure (and best opportunity for the better half of the decade to deliver one last CPU knockout punch). With a comparable product, AMD gained big- respect, trust of OEMs and customers, and a positive reputation. This will carry over to profits in a better economy.

And when uPs truly become a commodity product

With Northwood walking in at nearly $600, with Xeons and Itanium's in the $xxxx range, this isn't something to worry about for quite a while yet. But to finish the sentence, with fewer fabs, a smaller die size (probable), and less Cap Ex to worry about, AMD will be better positioned to handle such terms.

Much more central to Intel's future success is what they are doing in networking.

To justify a price greater than $5/share, Intel needs a LOT more than networking. While P/E isn't the end all, be all indicator, Nasdaq proves that it is at least relevant, and without MPUs and related income, Intel will be sorely lacking in E without their CORE COMPETENCY.

I guess the minute AMD thinks about networking, it will become last decade's fight too...


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