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Crossroads for Intel
pillageplunder writes "Businessweek offers a pretty balanced read on what challenges Intel faces in the upcoming year. Rivals Samsung and AMD are making inroads on Intels core businesses, an expected cyclical industry downturn looms next year, and with several critical delays in new (for Intel) markets puts its strategy at risk. A neat read."
problems at Intel, problems at Microsoft. Could it be that some companies just get too big for their own good?
Happened to other comanies, just look at US Steel, in 1918 they represented 3% of the GDP of the US, but they got too big, and eventually competetitors, both at home and abroad ate up most of that.
Monstar L
I've been on the marketing & sales side of computers for 21 years (started in Oct '83) and the only cycle I've ever been able to reliably predict is a slow down in corporate purchasing during the month of February. That does not necessarily relate at all to the semiconductor cycle, if there is one. I used to meet regularly with Intel marketing reps and they never mentioned a cycle. There may well be a longer term cycle, such as a four year or five year cycle where so many machines are bought at the beginning of a major product cycle such as the intro of the P4, for example. In that case, a lot of machines would come out of service starting at 2 years (leases) and out to five years (fully depreciated). This is all to be taken with a grain of sale of course - there are just too many variables (intervening and contravening).
http://www.busyweather.com/
Most businesses are considered "cyclical". Basically, this means they do better whent he economy is better, worse when the economy is worse. i.e. they do better when people and businesses have more money to spend. People hold off buying when they don't have the money, because these are discretionary expenses.
This is in contrast to some businesses which are fairly "noncyclical"--demand is relatively constant over time, regardless of ability to paty. Medical care is a classic example here--people don't decide to hold off on having tha heart attack until they have a better job.
Then, there are some "countercyclical" industries--ones that do BETTER when people have less money to spend. Examples here are businesses that make "inferior" goods--cheaper substitues for more expensive products. They do better when people have less money, because in good economic times, their products are more attractive.
To an extent, there's an aspect of being "cylical" to most businesses, but some are more tied to economic cycles than others. Intel makes a good case for being a very cyclical business--computing upgrades are a fairly discretionary expense, and delaying upgrades is a fairly common response to bad business climates. On the other hand, when the economy picks up, and people have money to spend, getting those computer upgrades they've been meaning to get for awhile becomes more attractive.
I hear the pipeline on the P5 is going to be so long that Halliburton want to license it for reconstruction work in Iraq.
It is a neat read because I don't work at Intel anymore.