Menu
Intel gives revenue warning

Intel gives revenue warning

Facing increased competition throughout its line of processors, chip giant Intel warned last week that its first-quarter revenue would be lower than expected.

Intel, based in Sunnyvale, California, predicted its first-quarter revenue would be $US8.7 billion to $9.1 billion. That compares to the previous expectation, issued in January when it reported fourth-quarter 2005 results, of $9.1 billion to $9.7 billion.

In a statement, the company said the shortfall was "primarily due to weaker than expected demand and a slight market segment share loss."

Indeed, Intel's warning on softer earnings was in line with a general semiconductor market downgrade issued last week by Citigroup.

But analysts say the problem may be closer to home.

"The momentum right now is favouring AMD. That seems to have been the case for six months in terms of people being aware of it, but more like 18 months in terms of AMD having an impact on the market," says Roger Kay, an analyst with Endpoint Technology Research Associates.

A number of investment analysts are starting to urge caution on Intel. Last week for example, investment firm ThinkEquity Partners lowered its Intel rating to "sell" from "accumulate." ThinkEquity says Intel will have to cut prices as it faces increasing competition, especially in servers, where Advanced Micro Devices has made inroads with dual-core chips.

"It sounds like a cliché to say they're [AMD] firing on all cylinders, but with Opteron they have price, performance and thermals all working in their favour. That was a technical achievement. Intel bet on simpler technologies that were easier to implement, and it turned out not to pay off so well," Kay says.

In the past, AMD has been especially vulnerable to Intel's Centrino processor for applications in low-power notebooks. But today, Kay says, AMD enjoys a technology lead throughout its product line, from Opteron to Athlon and — most recently — Turion, aimed at low-end machines.

Last week, Lenovo Group dealt a blow to Intel when it offered its customers a choice between AMD and Intel chips in its new 3000 series desktop machines.

"AMD has a good story; same performance, better price. With Opteron, they can say 'better performance, better price, and oh, by the way, better thermals.' And now it looks like Turion is doing well in retail sales," Kay says.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

The leading female front runners of the New Zealand ICT industry joined together for the annual Reseller News Women in ICT Awards event at the Hilton in Auckland, during which hundreds of guests celebrated 13 outstanding individuals who won awards, chosen from more than 50 finalists representing over 30 organisations.

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards
Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Show Comments