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Intel Admits To Falling Behind AMD
Vicegrip writes "CNN is carrying a Fortune story covering an analyst meeting held on Thursday. There, CEO Otellini admitted Intel has fallen behind AMD with lost market share, technological leadership, and recently profitability. Intel also announced cuts to 1 Billion in spending." From the article: "Intel's market share recently slipped below 80%, and Otellini strongly emphasized the need for market share gains in all his remarks. On the other hand, he also suggested that Intel's recent market share losses (to AMD, whose name was not mentioned) were in line with historical variations which tracked to Intel's product generations."
So the CEO admitted to falling behind AMD in market share without mentioning AMD's name? Makes perfect sense... ...
It's not common for a CEO to make such admission, which can only mean one thing -- they already have plans to regain those market shares. Or is it the classic "Avis: We Try Harder"?
It's like poorer people tend to avoid being seen as poor, while wealthy people almost always say they are poor.
Please stop entering code 2,2,7,6,6,4
From TFA Otellini did offer one excuse for its poor performance in market share in the past year - a shortage of "chipsets." Having only bought AMD for over 5 years now I have never even tried to buy an Intel based motherboard, is this staement true has anyone had purchasing problems with Intel based M/boards?
Sometimes I get lost inside my head....
They've been screwing over their customers for 15 years. With stuff like the spying serial number, tpa, etc, they've had an attitude of buy what we tell you or get lost. Not to mention price manipulation. They hold back each new iteration until prices slack off on the current product. AMD beat them to the 1 GHz punch because intel was holding back their own 1GHz chip to squeeze more profit. After AMD beat them, they released theirs 2 days later.
Now that it's coming back to bite them on the ass, I think it's wonderful.
My god, the spin is breathtaking:
80% market share != Falling Behind
50% market share == Falling Behind
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It's good to see Intel fall behind what used to be an underdog, however don't get too excited all. While I know AMD is usually the geeks choice, there will only be negagive consequencs if Intel's market share falls too much lower. We need competition to drive innovation, else we will halt to a technological standstill.
Go ahead and call me unreliable; reliable is just a synonym for predictable.
"Intel's market share recently slipped below 80%"
Around eighty % is still incredible, not least when you have a competitor like AMD. But I guess companies like Intel do what they can to instill fear in their employees to get them to work harder.
Will code a sig generator for food
With intel increasingly becoming dominant in mobile markets, particularly capturing the next-gen Apple market share, I think that cost-cutting is eminent. AMD holds a firm grasp on the fastest chips, and some of their 64-bit chips are available in notebooks geared toward power-users wanting desktop replacements. There is a big difference nowadays between the size, heat output, power consumption, and power, so chip makers need to emphasize on certain markets. Intel couldn't hope to maintain dominance forever, and AMD and Intel have become the x86 processor oligopoly, both of them basing their business decisions on each other. AMD has done some fantastic R&D and built itself from the ground up, and there has really been nowhere for intel to go but down. Both these companies will be around for the foreseeable future, at least until some Chinese/Korean/Japanese company whoops us =)
Intel's marketshare is deceiving because it is propped up on a number of "exclusive" contracts. Once those go away, and they will as AMD pulls away technologically and pricewise, Intel is going to see the market flipped in a very short amount of time.
Intel Outside, not just a good idea anymore.
If brevity is the soul of wit, then how does one explain Twitter?
AMD on the other hand is showing steady and strong growth. It has solidified its place in the market and has shown that it not only can compete, but will continue to innovate and compete with Intel.
In the end, something like this is only good for the consumers. Intel admitting losses to AMD will raise the bar of both companies so they can continue to compete, bring us better technology, faster.
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Step one: Admitting your problem.
The most perfidious way of harming a cause consists of defending it deliberately with faulty arguments. - Nietzche
Thanks to Intel, Bumfuckgrad has expandability built in!
I think Intel may not have much to worry about, with the recent headway that their Israeli Labs have been making with the development of the Pentium M, Centrino, and now the Core Duo/Solo chips.
It's no wonder why there was some market loss when all the could produce out of the US Labs were overclocked P3/P4 chips that produced too much heat to be useful in mobile applications.
Here is an Intel internal memo from the CIO's office. Intel is going to be firing (aka "redeploying") nearly 1200 people.
April 26, 2006
IT's first steps in 'relentless pursuit of efficiency'
Understand IT's response to Otellini direction
As Paul Otellini outlined in his April 25 Exec Connect Webcast, Intel faces significant challenges in Q2 and beyond as we adjust to meet our new business climate. With 2006 revenue now projected to be approximately 3 percent below 2005 and spending reduced by approximately $1 billion, Paul has given clear direction that Intel must "re-structure, re-size, and re-purpose" in a "relentless pursuit of efficiency." As a result, all organizations, including Intel Information Technology (IT), have been given new spending and headcount targets and a corporate effort has been launched to determine how to streamline Intel to make our company more agile and more competitive long term.
IT's response
IT's response is clear. We must rapidly adjust our programs and headcount to meet our new Plan of Record (POR) spending and headcount targets. And we must streamline our organization to maximize the services and programs we can deliver to the company while executing on our commitments to keep Intel running and to deliver on new capabilities.
Our immediate first steps are to stop selected programs completely, scale back other programs, and remove unnecessary overhead across the organization. The identification of these programs will be completed in roughly 30 days.
To create a more efficient IT, we must develop a more compact, less hierarchical organizational structure, reduce process and operational overhead, and selectively reduce jobs in some skill areas. Identifying specific actions in this area will take 60 to 90 days to complete.
Redeployment will be necessary
Taking these steps will require the redeployment of some IT personnel. Redeployment, or the effort to move employees to areas of greater return when there is a change in business conditions, is a standard practice that allows Intel to remain competitive and increases opportunities for employees. We anticipate some redeployment will begin before the end of this quarter and all redeployment will be started by the end of Q3.
I know this is a difficult time and redeployments are not always easy. And I know these actions are absolutely necessary to improve our competitiveness and effectiveness as an organization. You will hear more at the coming business update meetings (BUMs). I urge everyone to attend.
If you were unable to watch Paul's live Webcast, replays are available at the Webcast Exec Connect Events Site.
Thank you,
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Your lips keep moving, but I can't hear what you say.
Intel has such a long way to go at the highest end. They need to move away from their silly, old fashioned CPU <-> Northbridge <-> RAM architecture. I think it's telling that Otellini blamed "chipset" shortages for some of their market share loss, whatever the hell that really means. Intel is going to eventually have to sacrifice its chipset business to stay competitive. Nothing will change that. The memory controller has to be moved on-die. HyperTransport is here to stay and it will wipe the floor at the high end.
It's not just getting rid of NetBurst-- high IPC is great --but the more you have cores and sockets contending for memory access, the worse it will get for a shared FSB. Get your head out your butt Intel and fix the design.
90% of Apple computers sold are either laptops or SFF desktops, and Intel simply has the better product in these markets with Core.
Whenever I hear the word 'Innovation', I reach for my pistol.
No, not really. Given identical graphics cards, I'll take the one in the machine with the AMD CPU in it over one in an Intel box any day.
Fun with Anagarams! LADS HOST, SHALT DOS. HAS DOLTS. AD SLOTHS, HATS SOLD. ASS HO, LTD.
AMD beat Intel in that race any way you look at it.
Do you see what a little competition can do for a market? Everybody expected AMD to die years ago until they got to 1Ghz before Intel and now they are around the 20% mark for marketshare. Intel has responded by bringing out a load of new technologies and have IMO been dropping prices on products far more regularly.
Jonathanjk.com
Intel admits that it's loosing to AMD?
What's going to happen next? Politicians admitting they lied to the people?
Agreed. Intel's GROWTH is falling behind AMD's growth. Intel still has a firm grip on the market. Intel still sold more chips then AMD. Intel is only falling behind their previous performance. Which as mentioned in TFA, is still within their historical variance.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
That's why they broke up Knight-Ridder, an extremely successful newspaper chain with 20% annual profits. Huge profits or not, other newspaper chains were doing even better. Sorry folks we need to see 30% profits or you're not doing your jobs.
The results are just what I would have though - they lose their technical edge, but retain their strong position in the market.
My guess is that Intel's business model quickly changes from designing and building chips to buying other company's designs ---- just like the large drug companies mostly get drugs by investing in and eventually buying small drug research companies.
I think that was the plan when the put a MBA in charge, and I think this is the expected result.
Is it possible this is a PR stunt to aid Intel's image in light of the antitrust trial? If Intel admits that it has lost significant market share, it makes AMD look that much less helpless.
Yes, now that the legal discovery process has begun, now is the time to get the public relations machinery in gear.
Poor-mouthing and playing up their enemy's stature so the judge will look sympathetically at Intel and say:
"Oh poor Intel, even though your enemy makes a good case, the competition has leveled out satisfactorily in this case... case dismissed!"
I believe this could very-well be the strategy at this point in time. IANAL but playing wounded to the judge will/should score them points.
God: When you do things right, people won't be sure you've done anything at all.
And how does this admission make Apple feel? They've hung their star on Intel being the best out there. Just a wild guess, but Steve Jobs is probably not commenting on this revelation right now.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
There is a good possibility that some other player may come out of nowhere and pass up both Intel and AMD. The reason is that current processors are based on a computing model that has not changed drastically since the days of Charles Babbage and Lady Lovelace. They are all optiminsed for the algorithm. Problem is that basing software on the alogorithm is the primary reason for the current software reliability crisis. Switch to a signal-based, synchronous software model and the problem will disappear. Will either Intel or AMD heed the warning? I doubt it. Those two are cookies cut from the same cookie cutter. They are way too busy looking for advantages within the current paradigm to notice the world passing them by before it's too late. Fortunately, there are other players in the game and somebody is bound to see the writing on the wall.
Why Software Is Bad and What We Can Do to Fix It:
I think it's largely a visceral dislike of a single entity having so much power. I'd prefer to have dozens of chipmakers all competing bitterly. Maybe 5 big standard architectures.
Anyway, when one powerhouse controls 90%+ of the market I get nervous. Especially when there are allegations of abuse, innovation slows, prices are high, or the situation lasts for a long time.
It seems in many industries we are headed to 1-3 (whatever the situation and antitrust law allows) Megacorps that write their own ticket.
I am flexible about most things, but tend to prefer the underdog if price and performance are comparable.
Man, you really need that seminar!
You are exactly right. I hadn't even considered the timing.
"What, us a monopoly? No way, Your Honor! We're slipping behind even as we speak! Massive layoffs! Unemployement! Economy crippled! Wolves at the door!"
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
So it didn't, and this was actually somewhat predictable. Intel has tried these flyers about every 10 years: first, IAPX432. next i860/960. Now IA64. This was the most costly by far. I'm a little surprised they admit it, but possibly that's because the "A" team is back on x86, and they've got a comeback cooking. It wouldn't surprise me.
Wow, just wow ! Did you guys see that in the article:
<<According to some industry experts, Google is now assembling so many of its own servers that it may be the third or fourth-largest server maker in the world.
>>
I think that a lot of companies could reduce their expenses by doing the same thing than Google: instead of buying expensive hardware, warranties and support from IBM/HP/Dell/Sun, they could hire people to design, build and maintain their own IT infrastructure. I think it makes sense for any shop with 1000+ machines. Think about it again:
To any non-believer: Google does exactly this, and it works very well for them. So why not starting to do it at your company ?
I've setup osx on amd athlon64 3000, asus k8v, 1gb ram and radeon 9600. Runs great, but the sound doesn't work (yet). And I think celeron is the worst chip on the market, so congratulations intel.
--
So who is hotter? Ali or Ali's siter?
Sorry, I don't have your hard numbers, but subjectively, I can say that I was one of those "genuine intel" people who would have been afraid to buy non-Intel chips back in the 386/486/pentium days, and now nearly all my friends run AMD athlon or AMD64 systems.
If you go to a large computer parts mega-store like Fry's, you'll find almost equal motherboard / cpu / system floorspace for AMD and Intel systems.
Think about that... if display space in Fry's is a measure of interest and systems moved, then Intel's current 80% number is only going to fall as their old systems die and people go out to replace them.
"We anticipate some redeployment will begin before the end of this quarter and all redeployment will be started by the end of Q3."
Why not just say it like a man?
"We will be redeploying many of you from your Aeron to your SOFA just in time for you to file for unemployment insurance before taking back the Christmas presents you were hoping to buy for your parents, so that your car is not repo'd as you struggle like mad to pay your rent or mortgage in the wonderful Bay Area."
How hard is that?
Please, no more myths about Intel power hungry designs. Core Duo fixes this for good:
e _papers_and_tech_docs/30430.pdf
3 0922102.pdf
AMD Athlon64
Freq: 2.0 GHz
Tcase: 70 degC
TDP: 89 W
http://www.amd.com/us-en/assets/content_type/whit
Intel Core Duo Destkop (Yonah)
Freq: 2.16 GHz
Tcase: 100 degC
TDP: 31 W (scale to 70deC like AMD puts you at about 20W).
http://download.intel.com/design/mobile/datashts/
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AMD is hitting Intel in their soft spot, Corporate Culture. AMD is using open buses like HT and supporting small companies like DRC to take over their sockets. Intel will never go there. AMD is supporting Linux and linuxbios which made it possible for us to do what we did. We talked to Intel and got brushed off. We talked to AMD and were embraced. Intel will never stop the growth AMD is having if they keep their systems closed. AMD is for open systems and Intel is not. AMD is helping innovators and Intel is not. Intel will not change their ways until it is too late. Steve Casselman, CTO DRC Computer
if display space in Fry's is a measure of interest and systems moved, then Intel's current 80% number is only going to fall as their old systems die and people go out to replace them.
Display space at Fry's, however, is not a good measure.
Most people who purchase computers never look inside the box. That the component sellers promote AMD parts, and have for years, is part of AMD's success. But the real statistic that matters is the number of chips are being shipped market-wide. And AMD is still far behind there.
My two newest motherboards have AMD processors, but it was a 'blah' decision, made because those are the motherboard/processor combos that Fry's 'blows out the door' for $79. I viewed my most-recent-before-that purchase of AMD processors a grave mistake, they were K6-2s.
Does anybody else think perhaps a motive behind Intel's admission to this is to give themselves a more credible look in the antitrust allegations that are against them?
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
If you really look HARD you can probably find a Pentium daughterboard that will plug into your 80286 processor socket.
However, that means you would need to have a pin-grid-array '286 motherboard, whereas most '286 processors shipped with PQFP.
Sorry.
But good luck. You can probably fit one of those ITX motherboards in your Leading Edge Model D case. You'll have to rewire the power supply connector, though.
BAHAHA Leading Edge! I actually had one of those :P Well actually I have a socket 478 which is completely worthless since intel moved all their p4s to some other new shitty socket for absolutely no reason, doesn't matter much anyways as conroe will be the next cpu i will want, and it wont even be compatible with it probably...
People on /. seem to focus just on processors, but the reality is that Intel is much more than that. While AMD can't seem to make anything other than processors--they were losing so much money making flash memory that they had to spin off their flash business as Spansion--Intel is much more diversified with an eye to the future.
Intel's "digital health" group hasn't made a big splash yet, but with health care accounting for 15% of the U.S. GDP (and growing rapidly), there's clearly an enormous potential market for technology.
Also, Intel's Teach to the Future has already trained >3 million teachers on incorporating technology into their classrooms and lessons.
Intel is the main sponsor of the International Science and Engineering Fair.
They're doing cool research in silicon lasers.
They recently ponied up $2.5billion for NAND flash development and manufacturing.
They've invested >$4billion in ~1000 companies through their venture capital arm.
And lots more...
he also suggested that Intel's recent market share losses... were in line with historical variations which tracked to Intel's product generations."
corporate-speak translation- "Yeah we always lose money when we make shitty product and bad decisions, this ain't new."
No unauthorized use. Trespassers will be shot. Survivors will be shot again.
You have to ask why Intel is admitting this. Could it be because they believe the net impact will be positive, given that this may drop their stock price a little, while now clearly admitting they're not a monopoly may affect AMD's case against them in their anti-trust suit?
Someday, if Target takes the market share, you might visit them, right?
I don't always use unix-like operating systems; but when I do, I prefer FreeBSD.
Which were $12 billion last year, and are $9 billion this year. That's still a lot of money, but not acceptable to Wall Street, which expects certain kinds of investments to grow consistently, no exceptions.
You neglected to subtract the money Intel paid for their stock buybacks, aka mopping up the shares dilution that would have happened when Intel management exercised their options, aka management looting of the company. They were blowing $2B every quarter for a while but they can't get away with that any longer (as they admitted during their last earnings conference call).
Check out Intel's balance sheet. Note how their cash on hand dropped $billions last quarter and their accounts payable rose. Stopping the buybacks will slow the cash burn but won't stop it. If they can get high enough yields on their next-gen chips and otherwise manage not to screw up then they'll hang in there but oh man, I would not want to be an Intel stockholder right now. Being in a high fixed cost business when your margins are plummeting is a scary thing.
90% of Apple computers sold are either laptops or SFF desktops, and Intel simply has the better product in these markets with Core.
Until the Turion X2 ships, which won't be much longer. Going with the current single core Turions instead of the Core Duo would have made more sense since then OSX could have been 64-bit from the get-go. Now Apple will have to support both 32-bit and 64-bit codebases. Were Intel's cut-rate chips and other support worth it? Time will tell, but given that things like codecs get a *nice* boost from AMD64 (it's not just about breaking the 4GB barrier) I think Jobs screwed up.
From Washington Post: "Over the next 90 days, executives will identify underperforming business groups and cost inefficiencies but will not wait until the end of the review to start implementing changes, Otellini said." wp online
That is the end of the Itanic as I see it...
It is pretty simple. Intel has the larger market share and they do not want consumers to even be aware of the name AMD.
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I am a system administrator, and CTO.
I manage servers, with tens of thousands of users, all over California.
ALL of the servers I've deployed in the last 2 years have been AMD, with a heavy bias towards Opterons. For me, one of the key advantages AMD has over Intel is the "last resort" advantage.
If I deploy Xeon servers, and something goes terribly wrong, I can't go to a local retail outlet and buy any hardware that would work - Xeons are not binary compatible with X86. Local tech shops here in my hometown (Chico, CA) don't have Xeon anything. But they DO have Athlon/64s in droves!
So, if I deploy an Opteron server, I *know* that I can get an Athlon/64 that's binary compatible with my system images from the local l337 Gam3rz computer store with aliens and funky lights, but that's binary compatible with my rackmounted servers. No matter what, I have something I can count on in less than a single working day. I've had to fall back to this in the past, so I'm ready to in the future.
This gives me a worst-case recovery time of about 4 hours during business hours. (the only ones that really, really count)
Xeon is compatible with... Xeon. At best, in a worst-case scenario, I wait 48 hours to get some kind of support in small town, CA. Ouch!!!! No way this is acceptable.
4 hours vs 48 hours. Not a hard decision... So Opteron/Athlon/64 it is, then...
And I don't mind that it's both faster and thousands $$$$ cheaper!
I have no problem with your religion until you decide it's reason to deprive others of the truth.
And for programmers, the Intel C/C++ compilers for Core look fantastic. The extra performance that will come out of compiling with those will be really amazing I think.
Yes, you can get a huge boost out of a specially designed compiler. That's why Itanium is doing so well - you can write slow, shitty code but once you've fed it through that incredible Intel compiler it just runs like shit off a shovel.
Seriously, when you say that the compiler will provide an amazing boost, I assume your definition of amazing is "maybe a couple of percent on average code with architecture specific optimisations"?
Are you confusing the amount of power consumed by the device and the amount of power consumed that is converted into heat?
I do not see any information contained within your post, the two processors mentioned will almost definitely not be operating at the same efficiency (and efficiency can only be described properly if you know exactly how their algorithms work.
In any case, I thought it was common knowledge that the way Intel describe their electrical power was calculated differently to the way done by Intel, thus making any such comparisons straight from the spec completely meanignless.
Are you confusing the amount of power consumed by the device and the amount of power consumed that is converted into heat?
No, but you are. Power == Heat. No way around that without rewriting the laws of thermo. But I'd really like to hear your explanation of power. I need a good laugh.
I thought it was common knowledge that the way Intel describe their electrical power was calculated differently to the way done by Intel
Yes, AMD uses a lower Tcase, which means their spec'd power numbers are optimistic because they assume the OEM chassis has better airflow. Intel takes a pessimistic view of 100 decC. In other words: Intel doesn't intentionally use a lower Tcase to look better.
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Uhh... Xeon *is* x86. Maybe you're confusing it with Itanium, which is non-x86?
Fume away. I've been frustrated by this before but think about it, it is a royal pain to maintain backwards compatibility. And "royal pain" translates into "less bang for the buck". You are better off to sell your old PC stuff or donate it to the salvation army and buy new than to think you can keep up by incremental upgrading.
I add up all the time I've spent on upgrading motherboards, processors, ram etc. etc. and it really just wasn't worth it. Just live with what you have a bit longer and buy new and sell the old. The value in that multi-kilobuck machine you bought is gone. It sells at the local flea market for $50 because that is all it is worth. Painful but true, at least IMHO.
In other words I don't think the changes in pin out etc. are really a form of planned obsolescence but really are technically driven for the most part.
90% of the wealth is in 2% of the pockets. Bummer to be in the majority.
Are you saying that 100% of power consumed by the PSU gets converted to heat?
The executives at Intel announced the market share loss way back in January, prompting a massive drop in share price. Since then they've lost a little bit more market share, but like I said...this is old news.
Secondly, Intel is far from out...their soon-to-be-released latest generation of processors are going to blow AMD's current offerings out of the water in practically all aspects, including cost per watt. And they've even bumped FORWARD the release date of the Woodcrest processors to June. On top of that, they've engaged in a major restructuring effort and a price war. Intel was caught with its pants down resting on its laurels. However, the sleeping giant has been awakened, and Intel has the tech and the fab capability to make magic happen. AMD has an "in", which is great...competition is good in any market. But they're hardly replacing Intel, nor are they even going to be superior at this point. With P4 and Netburst going the way of the dodo, Intel is looking vicious. Now all they have to do is trim the fat to get lean and mean.
As a direct reply to some posters here:
The Conroe will launch when promised.
That it is a real launch with the product in stores, not just a paper launch.
Release dates have been pushed forward and Intel wouldn't dare goof this release...their stockholders are pissed enough as is.
That the performance will be as great as promised.
Plenty of benchmarks and specs and reviews have been released already. I haven't seen one that didn't decimate the existing chips. On a side note, Core Duo is an equally impressive release that is tearing up the benchmarks.
I'm just shocked at how cool Intel managed to make the new chips...Conroe's MAX will be 65 watts...that's already 30 watts below the P4's max. And the ultra low variants of the Conroe are slated to be like 40 watt max.
Intel has always had a process technology advantage over AMD. That never stopped AMD from shipping competitive products.
Process technology is not the end-all of making a respectable chip. Intel hampered themselves heavily by investing WAY too much in trying to stretch out a 6 year old architecture. Most of Intel's new architecture releases have been monsters...Pentium M, Core Duo, and the upcoming Conroe. Intel is in a fundamental generational gap. AMD has been beating the old platform. Lets see them keep up with the newer architecture. At the moment, K8L aside, I see nothing on the horizon. And frankly, as far as anyone knows at the moment, K8L is vaporware...nothing is known or even predicted about it.
Also, note that AMD's fab situation has gotten a lot better in the last year - with Fab 36 (and soon Chartered), AMD has the capacity to take on Intel in the market
While noted that AMD's fab capabilties are increasing, you go too far in claiming they can take on Intel's capacity. AMD's new fab gives them the ability to ship about 100 million units by 2008, which btw is roughly equivalent to Intel's capabilities way back in pre-2003.
AMD has always been conservative in launching new processes, and it has benifited them in the past. Intel's 90nm process turned out to be the nail in the Prescott coffin, but AMD's 90nm launch resulted in CPUs that clocked much higher, used less power, and cost less money.
But once again, AMD was competing with an aging platform, one that AMD largely always had a slight edge over. I want to see how they respond to Conroe.
While I'd agree that Conroe is looking quite good, note that Athlon 64 is not sitting still. Even a simple d