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**Slimprofits** · October 15, 2009, 02:23 PM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

I've been patiently awaiting this post from you.

Obviously not shocked the fine against INTEL or the Goldman GAAP speak hasn't been mentioned on CNBC or Bloomberg over these last couple of days.

Maybe the stock markets are going to cruise along until FASB expands the use of fair-market values in late Q3 / early Q4 of 2010.

**pksubs** · October 15, 2009, 09:28 PM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

the Intel topline (revenue) went up though indicating greater activity. So did their gross margins. EPS/profit would have been affected by the penalty to EU.

**c1ue** · October 16, 2009, 07:20 AM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Intel revenue year on year is still down $828B (8.8%). Operating income YoY also was down $519B (20%).

Net profit is only down $158M (8.3%) - but cost cutting is only going to take you so far.

Intel shipped a record volume of processors, but that is because of Atom: a $9 cost chip selling for $35 vs. what used to be a $50+ cost chip selling for $135.

Not a long term strategic win for Intel...

**seanm123** · October 16, 2009, 08:14 AM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Originally posted by babbittd View Post

Maybe the stock markets are going to cruise along until FASB expands the use of fair-market values in late Q3 / early Q4 of 2010.

FASB? Whenever FASB growls they git hit on the nose with a newspaper.

Last October the SEC's chief accountant, Conrad Hewett kneecapped the big auditing firms, which had taken a unified stand on when to require writedowns of so-called perpetual preferred securities.

Long slog it is folks.

**Fiat Currency** · October 16, 2009, 08:44 AM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Originally posted by c1ue View Post

Intel shipped a record volume of processors, but that is because of Atom: a $9 cost chip selling for $35 vs. what used to be a $50+ cost chip selling for $135.

Not a long term strategic win for Intel...

I respectfully disagree. Silverthorne and Diamondville have lead to Pineview. All ultra-low power variants with Pineview being a complete system-on-a-chip. These chips are simple, x86 compatible - and I believe - are/will be the first ones to make it to the 32nm process.

With speed, portability, low-power, and high-battery life being key features - there will be a growing market for these types of processors.

**karim0028** · October 16, 2009, 09:53 AM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Originally posted by Fiat Currency View Post

I respectfully disagree. Silverthorne and Diamondville have lead to Pineview. All ultra-low power variants with Pineview being a complete system-on-a-chip. These chips are simple, x86 compatible - and I believe - are/will be the first ones to make it to the 32nm process.

With speed, portability, low-power, and high-battery life being key features - there will be a growing market for these types of processors.

Exactly, and with lower prices, you assume the possibility of higher volume with a pretty decent profit margin and entering markets they werent in before and converting previously ARM and Freescale design wins.....

**c1ue** · October 16, 2009, 01:10 PM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Originally posted by Fiat Currency

I respectfully disagree. Silverthorne and Diamondville have lead to Pineview. All ultra-low power variants with Pineview being a complete system-on-a-chip. These chips are simple, x86 compatible - and I believe - are/will be the first ones to make it to the 32nm process.

With speed, portability, low-power, and high-battery life being key features - there will be a growing market for these types of processors.

You can believe what you'd like - but the question I'd ask is this:

Atom area is 25 mm2

http://www.nanotech-now.com/news.cgi?story_id=28290

All of this on a chip that measures less than 25 mm�, making it Intel's smallest and lowest power processor yet.1 Up to 11 Intel Atom processor die -- the tiny slivers of silicon packed with 47 million transistors each -- would fit in an area the size of an American penny.

These new chips, previously codenamed Silverthorne and Diamondville, will be manufactured on Intel's industry-leading 45nm process with hi-k metal gate technology. The chips have a thermal design power (TDP) specification in 0.6-2.5 watt range and scale to 1.8GHz speeds depending on customer need. By comparison, today's mainstream mobile Core 2 Duo processors have a TDP in the 35-watt range.

The Merom - on of the earlier Core 2 Duo - in the 65 nm process is 143mm2. Yonah - also 65nm - is 90 mm2

Wolfdale, which is one of the 45nm Core 2 Duos, is 107mm2

http://www.legitreviews.com/article/668/1/

With a die size of just 107mm² and 410 million transistors, it is smaller than its predecessor, the Conroe, as it had a die size of 143mm² with 291 million transistors.

So, certainly Intel will sell a little faster to the 3rd world with cheaper laptops and what not.

But will that compensate for

a) cannibalizing a big part of its previous entirely large chip laptop and PC market
b) selling less area with each replacement Atom chip - by a factor of 4 or more

Well, so far PC shipments still are down on a unit basis vs. even last year:

http://www.silobreaker.com/mobile-co...19651273916420

Despite earlier, more dire predictions, PC sales are now estimated to fall off just two per cent from 2008 totals, according to a report released on Wednesday.

That's good - except that volumes are holding up but ASPs are down.

And I'm not the only one thinking that selling lots of Atoms is hardly the savior of Intel:

http://www.mdronline.com/watch/watch...%23082409&on=1

Their worries aren’t entirely unfounded. Never has the price difference between Intel’s low-end and high-end PC processors been so wide and the performance difference so narrow.
Intel’s top-of-the-line PC processor is the Core i7-975 Extreme Edition—a quad-core, 3.33GHz chip listed at $999 (bulk pricing for 1,000 units). Intel’s bottom-of-the-line PC processor is the Atom 230—a single-core, 1.6GHz chip listed at $29 (same bulk pricing). Both support Hyper-Threading and 64-bit x86 extensions, and Intel manufactures both chips in its current 45nm high-k metal-gate process. Both can run Windows Vista and the installed base of PC software.

Yet the difference between their list prices is a staggering 3,400%.

Lastly ARM and and Freescale:

The Atom market is actually bad. Before the only possible company that could compete with Intel in the PC processor market was AMD. Other companies that tried to jump in have all failed miserably. And even AMD with its short lived design superiority in 2000 and 2001 was unable to provide the volume to take long term market share from Intel. Intel slashed prices and basically ground them into the dust.

But with the new tiny, low power, cheap, and x86 compatible market opening up, now companies like nVidia (GPUs), ARM, and so forth can now jump into Intel's core PC market.

http://techblips.dailyradar.com/stor...k_coming_2009/

Netbooks about to get a whole lot cheaper Nvidia has confirmed to Pocket-lint that it plans to release its own netbook later this year, powered by its new Tegra chip.

http://www.pcpro.co.uk/news/351619/a...k-stranglehold

British chip designer ARM is launching an outright attack on Intel with the launch of a 2GHz processor aimed at everything from netbooks to servers.
ARM claims the 40nm Cortex A9 MPCore processor represents a shift in strategy for the company, which has until now concentrated on low-power processors for mobile devices.

Are Atom's going to invade nVidia's GPU and ARM's mobile handset markets?

Not bloody likely. Intel has yet to successfully compete with nVidia's top line GPUs - Intel does pretty good vacuuming up the 'built in' graphics in the chipset side - while mobile designs are highly optimized for the cellular low power process. They don't use the same types of boards and I/Os as PCs.

That's why ARM doesn't sell chips, it sells a processor design which is implemented at each mobile design team. Or at least it didn't used to...

There might be some possibilities with Freescale's automotive and industrial HCXX processor lines, but it takes 4 or 5 years to qualify into a new automotive design win and we all know how the automotive industry is doing right now. The other lines are basically $1, $2, or $4/CPU for things like generator monitors - again hardly a big win for Intel.

So what happens when suddenly your main market is opened up to multiple new competitors? And you can't touch their core markets?

Last but not least, Intel has a lot of fabs to keep busy. These represent both massive original investment and massive ongoing costs.

http://www.intel.com/museum/online/funfacts.htm

Intel has five 300 mm fabs in production, including three 65 nanometer facilities. Two more 300mm fabs are under construction with production expected in 2007 and 2008 using Intel's 45 nanometer process.

Each 45 nm fab (and there are two) has a wafer output of something like 10,000 per month; at least TSMC is doing 140K/month now:

http://www.cens.com/cens/html/en/new...ner_29298.html

Industry executives estimated the tool installation would allow UMC to draw its output closer to No.1 player Taiwan Semiconductor Manufacturing Co. (TSMC), whose 300mm wafer output totals 140,000 units a month now, and keep staying ahead of Chartered Semiconductor Manufacturing Ltd., which is likely to merge with Globalfoundries after the Abu Dhabi government-owned fund Advanced Technology Investment Co. (ATIC) acquired major stakes in both Chartered and Globalfoundries.

280,000 - 45 nm - 300mm wafers = 70,650 mm2 * 2 * 280000 = 39.564 billion mm2

In Atom processors - this is 1.582 billion processors made per year, but in Wolfdale processors this is slightly under 369 million.(See Edit Below) The actual numbers are slightly lower since 100% of chip area isn't used, but the smaller Atom processors should have significantly higher chip area efficiency. Another factor is that not every CPU coming off the line will be functional - again I'd expect Atom processors to be more efficient in this regard as well.

Given PC shipments are well under 300 million, do you see the problem?

Intel may well have one 45nm fab too many.

A last note: some of you might know that TSMC is now making Atom processors.

This is equally a bad thing long term. Because one of the key differences between the fabs like TSMC and the in house manufacturers like Intel, AMD, and IBM has always been that the fabs are cheaper but the in house manufacturers get much closer to the 'theoretical' best performance of a given process. This difference was more than 20%.

Having Atom processors manufactured at TSMC means that Intel's netbook marketing and sales has also lost the previous manufacturing edge which Intel's fabs gave them. AMD, for example, was able to achieve its short lived leapfrog in 2000 partly due to a proprietary IBM process which proved impossible to import quickly to another fab.

This situation may have changed with IBM's Open Source, but I'm skeptical despite what the ex-Chartered folk tell me. Certainly it seems unlikely AMD will be able to re-leapfrog Intel to test this out.

Either way, a level playing field is not optimal for Intel's ongoing growth.

Edit: total silicon area from Intel's fabs overestimated by 2 - an extra 2 multiplied in. Thus total area should be 19.78 billion mm2 with corresponding theoretical Atom output of 791 million units and 185M Core 2 Duo units.

Of course factoring in actual yield will bring capacity needs up higher - I would guesstimate 90%+ yields for Atom with 60%-80% yields on Core 2 Duo. Typical first yields for brand new architecture chips would be more like 20% or 30% though that is based on my 5th, 6th, and 7th generation processor experience. Could not comment on the present 9th and 10th generation stuff.

Either way, potentially still a lot more fab than needed.

http://www.theregister.co.uk/2009/09...les_forecasts/

Today's prognostications come a few days after last Thursday's report by the researchers and analysts at Canalys, which might be best summarized by one quote: "The impact of netbooks has been profound."
According to Canalys, over 13.5 million netbooks were sold during the Meltdown-depressed first half of this year - a figure that makes the prediction of 25 to 30 million to be sold throuhout the year seem more than doable, especially considering the traditionally strong back-to-school and holiday seasons for consumer devices.

...

But clearly, someone is snapping up netbooks. As DisplaySearch recently reported, netbook sales were a mere 5.6 per cent of the portable-computer market in the second quarter of 2008, but grew to 22.2 per cent in the same quarter this year.

This trend reported in the above link is very consistent with Intel reporting record volume processor shipments but significant year on year falls in revenue.

**Fiat Currency** · October 17, 2009, 12:35 AM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

c1ue – firstly - I have no bone to pick with you. I enjoy your contributions to iTulip.

But I’ll bite some more ... as I’m in a sporty mood tonight.

You can believe what you'd like.

Agreed – and right back atcha. Thank God we both live in countries where free speech exists. Let’s hope they don’t try to shut down the Internet on us.

Many facts cited ...

... and I concede them all. You, I, and probably a few other iTulipers knew all that. Others I’m sure appreciated the info.

but the question I'd ask is this:
So, certainly Intel will sell a little faster to the 3rd world with cheaper laptops and what not.
But will that compensate for
a) cannibalizing a big part of its previous entirely large chip laptop and PC market
b) selling less area with each replacement Atom chip - by a factor of 4 or more

I’ll come back to that.

OK - here’s some data ...

Gartner Says More than 1 Billion PCs In Use Worldwide and Headed to 2 Billion Units by 2014
The number of installed PCs worldwide has surpassed 1 billion units, according to Gartner, Inc. Gartner analysts estimate the worldwide installed base of PCs is growing just under 12 percent annually. At that pace, it will surpass 2 billion units by early 2014.

Gartner defines the installed base of PCs as the estimated number of PCs in use as opposed to the number shipped over a given a period, which is reported in Gartner’s PC forecast and market share reports.

The world’s installed base of PCs remains heavily concentrated in mature markets. However, emerging markets will claim an increasingly larger share of the world’s installed base going forward as the rapidly rising PC penetration in emerging markets continues to drive strong double-digit PC growth.

“Mature markets such as the United States, Western Europe, and Japan currently account for 58 percent of the world’s installed PCs, but these markets only account for 15 percent of the world’s population,” said George Shiffler, research director at Gartner. “There’s a startling difference in per capita PC penetration between mature and emerging markets. Of course, much of this difference reflects the disparity in average living standards between mature and emerging markets. But, rapid economic development across emerging markets is not only narrowing the disparity in average living standards, it's closing the difference in per capita PC penetration between mature and emerging markets.”

“We expect per capita PC penetration in emerging markets to double by 2013,” added Mr. Shiffler. “Rapid penetration in emerging markets is being driven by the explosive expansion of broadband and wireless connectivity in these markets, the continuing fall in PC average selling prices (ASPs), and the general realization that PCs are an indispensable tool for advancement.”

Let me summarize. 1 billion PCs - growing to at least 2 billion. Mature markets are only 15% of the world’s population. Rapid PC penetration in emerging markets – doubling by 2013. PCs are indispensible tools for advancement.

Your own data confirms that Mature markets are only down 2% ...

Well, so far PC shipments still are down on a unit basis vs. even last year:

Despite earlier, more dire predictions, PC sales are now estimated to fall off just two per cent from 2008 totals, according to a report released on Wednesday. That's good - except that volumes are holding up but ASPs are down.

That data should be considered stunning. I’ve heard here somewhere on iTulip that we’re in a wicked recession, possibly a sudden stop, currency devaluation, inflation is coming, the USD$ is dropping its “favoured” status day-by-day etc. Yet the PC market is flat in the first world, and the overall market will double in a few short years thanks to the emerging markets.

I’ve talked about technology transfers here before – and this is another great example. Technology is critical for the Producer economy. It means productivity. Being a Producer will become cool again ... as derivatives, alphabet-soup-paper, FIRE (etc.) will not.

Perhaps you saw “the boy who conquered the wind” on Jon Stewart’s Daily Show - or read his book. He built a windmill using a book he found in a library. He built it from scraps. The average American throws better stuff out every month and probably couldn’t build one if they tried. (no offense intended) He recently saw the Internet for the first time. Personally I’ve been using it for about 3 decades now ... how about you?

I also heard somewhere here - that energy efficiency and Peak Cheap Oil are very important issues around the Globe.

What’s the annual wage in Africa? China? Cuba? (insert country here)?

Low cost. Energy efficiency. These are important things.

One of our companies sells a low cost, energy efficient house that can be built in 2 days. We can’t make them (and their plants) fast enough to address a fraction of the demand. I think there’s a glut of over-priced homes in the first world if I’m not mistaken, and a lot of people can’t afford them.

The first world is not the global market.

Sure Intel’s sales & profit are down. It’s a recession (or worse). Yet they still made - like - a couple billion dollars.

Have you seen their balance sheet?

I never said Atom was the saviour of Intel. I argue that it’s a sound business decision. i7 PCs and video cards are flying off the shelf where I live. The first world always pays a premium for the newest, fastest, best piece of gear. Geez – gamers can even afford them.

Lastly ARM and and Freescale:
The Atom market is actually bad. Before the only possible company that could compete with Intel in the PC processor market was AMD. Other companies that tried to jump in have all failed miserably. And even AMD with its short lived design superiority in 2000 and 2001 was unable to provide the volume to take long term market share from Intel. Intel slashed prices and basically ground them into the dust.

I never brought up ARM or Freescale - karim0028 did. S/He can address those.

I like nVidia ... but they don’t even own a fab and lost $30 million last year.

One of our companies has software that uses the nVidia GPU and does well in the high-end first world market. Have you installed one of those boards? They’re almost as long as my arm and need 2 power connectors. They suck power, and your lights dim if you run enough of them in SLI.

I do find it interesting however, that you note that Intel had both the cash and the balance sheet to grind AMD to a pulp. Such is competition and market share. I wonder how Intel will deal with Tegra?

However – competition is good. Prices come down. Technology advances. The market is doubling. There is room for a few players including TSMC, AMD, nVidia and ARM.

Personally - I'm not ruling Intel out.

Back to your first question ... I do think that the emerging market growth will help offset some of the cannibilizing.

Is it going to get interesting? You bet. Cash, assets, healthy balance sheets, market share. They all give you options.

The mighty do fall hard sometimes ... I guess we'll have to keep an eye on how all this plays out.

**c1ue** · October 17, 2009, 11:37 AM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Fiat,

I've never said Intel was going out of business.

But investing in the company via stock, for example, is contingent upon their continued growth.

Originally posted by Fiat Currency

Let me summarize. 1 billion PCs - growing to at least 2 billion. Mature markets are only 15% of the world’s population. Rapid PC penetration in emerging markets – doubling by 2013. PCs are indispensible tools for advancement.

The worldwide market for PCs is large and growing - though I have grave doubts about doubling in number in the next 4 years. For one thing with world population of 6.8B give or take with 1.3B being under the age of 10 - a market share of nearly 40% seems improbable.

Especially given approximately 2.7B lived on $2 a day or less in 2006: http://www.aidg.org/component/option...emid,34/p,112/

Even a $100 netbook with $15/month internet service and a phone line/cable modem is a major financial burden for this people.

For another thing, the really poor just need to buy a nice cell phone - an expense they already will pay for and for which internet service is probably relatively less. Is communication more important than computing power? Especially given internet access is extra hardware and service cost for a PC?

The analyst's numbers also discount the vast numbers of secondhand PCs and what not used by the poorer nations. Not all are junked in China. We see this already in cell phones for example.

I would expect this trend to accelerate since netbooks have components which are far more easily recycled for use (as opposed to for materials) than traditional PCs. Ever try using memory from a 3 year old PC for anything else? Not a problem with Flash memories.

Originally posted by Fiat Currency

I do find it interesting however, that you note that Intel had both the cash and the balance sheet to grind AMD to a pulp. Such is competition and market share. I wonder how Intel will deal with Tegra?

The strategy Intel employed vs. AMD won't work vs. ARM and nVidia or any other new entrant into the netbook CPU space.

Both companies can tap into TSMC and other fabs (just as Intel does) to manufacture CPUs. This was not an option AMD had.

Once the management at Intel understood the real extent of their problem (case of head up rear end for over a year), they finally figured it out that since Intel's fabs and AMD's fab were the only ones able to make leading edge processors, and AMD's fab simply couldn't supply more than 15% of the market, that cutting prices across the board but more at the high end meant starving AMD of income while Intel scraped by on the older, fully amortized lines.

Note this was not so much a factor of Intel's cash and balance sheet as it was Intel's ability to deliver far more CPU volume than AMD. If AMD had the ability to ramp up volume, then financing would easily have been obtained.

Specifically if AMD had more capacity - say 40% or 50% - then this strategy would not have worked since Intel would have taken hits all across the board and would have drained their cash hoard out in mere months. Fabs are use it or lose it deals and being second fiddle means losing money hand over fist where the other is making it hand over fist.

This won't work for the netbooks, and also discounts the potential impact of companies like the large Asian one which bought the former Centaur processor design - can't remember the name right now.

Note the $29 price tag of the Atom also is much higher than it could be. I don't have the 45nm finished wafer costs in front of me - but assuming large volumes largely cancel out mask costs then the actual silicon cost for an Atom is probably in the $4 or less range. Thus it is very possible that there will be margin losses as well as competitions rolls in - note Intel must amortize its fab costs themselves while the fabs are far cheaper.

On Intel's plus side - there is still a very strong unspoken relationship between Intel and Dell. That will help for a while.

Originally posted by Fiat Currency

Your own data confirms that Mature markets are only down 2% ...

While you see a mere 2% drop in PC shipments in 2009 as half full, I see a 2% drop in PC shipments as half empty if that is because 22% of the market is now netbook (and 1/4 to 1/3 previous revenue).

Originally posted by Fiat Currency

I never said Atom was the saviour of Intel. I argue that it’s a sound business decision.

It was not a decision, it was a get in before someone else gets in. The reason Atom is there is because the OLPC project proved that a much inferior CPU with flash memory instead of hard drives could provide a very low cost laptop with nearly full PC/laptop functionality - certainly more than enough for those only emailing/internet surfing.

If Intel had not done so (and a project like Atom is a mere 3 months compared to a typical 2 year leading edge processor design cycle), then someone else would have jumped in and potentially unseated Intel as the 'go to' netbook CPU - without any of the disadvantages noted above which AMD experienced.

But the cat is now out of the bag. We'll see how well Intel competes with companies which are either very high end (nVidia GPUs) or very high volume (ARM processors) or have commanding presence in key volume markets (China).

From my own perspective the netbooks are just accelerating computing demand in the first world. For every 70 year old senior who buys a netbook, there are probably equal numbers of 12 year olds who would not have been given a laptop until high school but were given a netbook because of its low cost.

Throw in the techies who buy a netbook because it is lighter and better battery life on airplane flights but still have PCs and/or laptops, voila!

**c1ue** · December 08, 2009, 05:31 PM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Either I'm channeling analysts or they're reading iTulip...

http://www.eetasia.com/ART_880059172...,ARTICLE_ALERT

"The story about 3Q '09 leads with Atom processors being sold in mini-notebooks (netbooks) manufactured and sold in China," said Shane Rau, an analyst with IDC, in a recent report. "While Atom processors led the PC processor market to reach record unit shipments, on the revenue side, their low average selling price led to notable price erosion, more than 7 percent."

"We believe the Atom is opening up many opportunities for Intel in the netbook, smartbook, embedded and handheld sectors," said Craig Berger, an analyst with FBR. "That said, we remain concerned that cannibalization, from notebook to netbook, from desktop to nettop, and from much higher CPU price points, will mostly or fully offset other Atom-driven benefits. In the netbook/nettop space, we believe systems will be split between Intel Architecture (IA) chips and Arm-based chips. While Intel has some strong unit opportunities, cannibalization concerns are paramount, particularly as Nvidia's Ion chipset or other better-performing co-processors could make Atom-based machines good enough for the masses," Berger said.

**karim0028** · December 08, 2009, 07:17 PM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Clue, while i agree with you that Atom comes close to cannibalizing other product lines i also believe that it opens alot of new doors that maybe competition heavy yet still allow Intel to grab more sockets...

Also, the usage market is very different in that while it may resemble a laptop, it just doesn't have the full capability/"umph" of a laptop and as such would only really be good in situations that require non laptop/desktop strength systems.... In other words using it as a user would use a full laptop is just not gonna cut it, at least for my usage it wouldnt... It may take some lowend laptop market, but in its current incarnation i would be hard pressed to use it as a laptop (a netbook yes, laptop it is not)... Atom's claim to fame is its 3D acceleration/video decode capability and its low power consumption, but currently with such low power usage you can only do so much...

BTW, i work very closely with all these product lines and as such probably cannot go into more detail...

**c1ue** · December 08, 2009, 07:53 PM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Originally posted by karim0028

ue, while i agree with you that Atom comes close to cannibalizing other product lines i also believe that it opens alot of new doors that maybe competition heavy yet still allow Intel to grab more sockets...

No question - the techno geek who used to have just one laptop may now have 1 laptop and 1 netbook. Similarly I've spoken of kids getting netbooks earlier rather than laptop, etc etc etc.

The question of course is how much of the previous laptop market was actually composed of users who primarily just do email, Internet, and light MS Office apps.

If this was 30% or more of the overall market - and these people switch over to netbooks because they have no need for dual or quad core Intel or AMD laptops, then the loss of pricing is permanent.

In which case a whole pile of extra netbooks/Atoms will have to be sold to compensate.

The issue of new entrants into the CPU field is also non-trivial. It is still quite far from obvious, of course, whether nVidia et al can "get 'er done" but the possibility is now there where once it was nonexistent.

In fact the hardware switchover has some ramifications which I believe have not been fully explored by analysts, developers, or the Wintel alliance: flash memory.

With a flash memory based system, it is now theoretically possible to literally move the OS and apps with the user.

Think about what this could mean: buying desktops, laptops, or netbooks could be divorced from buying apps.

Right now the switchover to a new system almost forces a new set of OS and apps - all but the most technically proficient don't have the skills, patience, or interest in preserving their old environment.

On the other hand having apps and/or OS on a flash drive...that would make the whole thing much much easier.

Forewarned is to have 4 arms.

**World Traveler** · December 08, 2009, 11:38 PM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Fascinating discussion. I worked on business side of IT, so a lot of the processor details are beyond me.

I had never heard of nVidia until today when my son, who's graduating in Electrical Engineering in June, called to say they were flying him out to California for an interview. I'm keeping my fingers crossed...

**FrankL** · December 09, 2009, 06:27 AM

Re: Great earnings numbers from Intel and Goldman Sachs? A closer look

Intel's situation is very difficult, as the choice for Atom was between capturing large part of a market that is bound to come into existence sooner or later with ARM's plans for upscaling their designs (Cortex A8, quad A9), or trying to prevent that market from coming into existence as long as possible because of the price cannibalization of their existing notebook chips.

I remain very sceptical about Intel's long term prospects in the sub-notebook market though, as I highly doubt ARM's designs can be matched in performance/watt.

Intel's main strength depends on what MS will do. Will they release a ARM version of Windows? That would require universal binaries � la Apple, or an x86 emulator which would make most existing apps even slower than they'd already be on a low-power ARM CPU.

However, if MS will ignore the smartbook segment, it'll be captured by the Linux OS flavours Ubuntu or even specialized distributions like Maemo (Nokia) and Intel's own netbook OS (has that been ported to ARM yet?). Intel seems to have striken a deal with Nokia for Atom, and I bet delaying introduction of a Maemo-powered smartbook is part of the deal. Now, the idea of Intel's own netbook OS running on a smartbook would be really ironic.

Non-GAAP Comparison
	Q3 2009	vs. Q2 2009
Revenue	$9.4 billion	up $1.4 billion
Operating Income/(Loss)	$2.6 billion	up $1.1 billion
Net Income/(Loss)	$1.9 billion	up $807 million
Earnings/(Losses) Per Share	33 cents	up 15 cents

GAAP Comparison
	Q3 2009	vs. vs. Q2 2009	vs. vs. Q3 2008
Revenue	$9.4 billion	up $1.4 billion	down $828 million
Operating Income/(Loss)	$2.6 billion	up $2.6 billion	down $519 million
Net Income/(Loss)	$1.9 billion	up $2.3 billion	down $158 million
Earnings/(Losses) Per Share	33 cents	up 40 cents	down 2 cents

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Great earnings numbers from Intel and Goldman Sachs? A closer look

Great earnings numbers from Intel and Goldman Sachs? A closer look

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