Hmmm INTC and AMD...who might know something about this...?
Fortunately I still have a recent PM on the subject in my outbox. Wow I wrote a lot of PM's this month! I had to edit this heavily, but i'm sure the approximate message remains the same.
AMD has a better product in ways people care about right now, which isnt to say that people care about the right stuff. Lower powered, lower clocked, more efficient, more reliable and multiple cores were things that Intel just couldnt get through their thick heads no matter how hard I swung the 20lb mallet. "More GHz, bigger, hotter, faster!!!". Hey, it'd always worked before. And SUN was thought to be the big threat, not AMD.
Real problem with NIH, not listening to what customers say they want instead of deciding what the right thing for them to have, even when what the customer wants is stupid. Its still what they want. IE the late adoption of 64 bit processors, which do nothing for 99.9999% of consumers and wont for years, if ever.
Real problem with succeeding despite themselves, simply because they have enjoyed a virtual monopoly, had the right product at the right time, did a great manufacturing job, and basically pounded 5c worth of sand into a $1000 slice of stuff. Building a factory was like installing a free ATM machine that spit out thousand dollar bills. Lots of senior management that couldnt find their ass with both hands if you put in a hinge at the waist and turned their top half around to face the back. Lots of "hurry up for no reason because I dont feel good about myself unless I make you work 12 hours a day to do something twice as fast as you said you could do it in" producing half assed results, burnout in people that matter, and a very short term focus on planning and deliverables.
Real problem with the channel starting to look at AMD more seriously.
Ok, whats good.
New boss. Paul Otellini is a smart, capable guy that comes from the sales and marketing side, not a founder thats into chip design and manufacturing. I like Paul and think he's going to be very, very good for the company. Craig Barrett was a jerk. Barrett developed intels current salary review process, which basically should come with a huge company dick [Ok, we'll cut that out too, you get the message]. The company really went bad when he took over. Bob Noyce was a real people guy and a wonderful fella and when he died and left the company in the hands of Barrett and Grove, it was bad, bad news. The three of them made a fine three headed beast that did a good job between them, but Noyce was the superego of the bunch. So good news at the top of the management food chain. In line right behind Otellini to see the seat in about 7-8 years is Louis Burns. I saw a lot of how he works. A Marketing and IT guy...very sharp.
So management should improve from the head down and has good people for succession.
Powerful, efficient manufacturing force worldwide thats moving into the far east and south/central america.
Strong hand on the channel. Intel can provide the product, consistently makes good stuff and doesnt screw stuff up a lot. Nothing like a thermal defect in a processor, a major bug or anything like that which requires a pc product recall to really make your day as a Dell or HP. AMD's had a bunch of those. They've also had trouble ramping, getting product out the door from time to time, and their manufacturing and defect avoidance still arent great.
Starting to "get it" with the products. Dual cores, the "M" series, hyperthreading, higher efficiency etc. Effective or not, its playing the right tune to the right people. Fallen a little bit behind AMD in the performance department. New roadmap and soon to appear products are REALLY good.
Winning the Apple business is huge. Not in terms of volume but in terms of prestige and PR impact. Being associated with the brand that gets people to pay a 40% premium for ordinary products cant hurt.
Losing the Xbox 360 business was huge. For the opposite reasons above.
Big horizon problem with performance not really mattering anymore.
A lot of strategic planning and product stuff was focused heavily on beating Sun. I never thought Sun was a problem.
Sticking with itanium was stupid. Being a follower to AMD on 64 bit was reeeally bad even though 64 bit makes no sense for a near term consumer platform.
Things dont look bad and should get better, but I dont know where the profit stream runs from. I cant imagine 8GHz pentium M's. I dont know what killer app could take 2-4x the current power.
Tons of cash. Comparing the two, I think INTC right now might have more cash on the books than AMD has earned in its lifetime. AMD cant get profitable. Selling against a much larger company that is an extremely effective and efficient manufacturer that has a lot of cash in its pocket? Suicide. About all AMD is doing or is going to do is make the chip business less profitable for Intel. Unless Intel completely steps on its dick and keeps standing on it for 5-6 more years, they have zero realistic chance.
Short answer: I'd buy some, maybe a nice chunk. Not too much though. Not like a 20-30% chunk of my portfolio.
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