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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."
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.
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,
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AMD's response will be a chip known currently as K8L. Whether it will launch on AM2 or AM3 is anybody's guess, but it will supposedly come out sometime in 2007. Intel will have at least 5-6 months with the performance crown since AMD can't beat Conroe with their current K8 processors on s939 or AM2.
The question is: can Intel retain the performance crown once they gain it? The last time Intel was the top dog performance-wise was back when the Pentium IV 3.2C was their flagship desktop part. That lasted until K8 hit the streets.
Wait, since I'm a fan of the underdog by default, does this mean I have to start cheering for intel? Because it still doesn't feel right. Wait, lemme check....
GO INTEL!
Nope, I feel dirty. Going to shower now.
... what did you expect, something profound?
AMD's response:
I love it when you "giants" be talking, saying my name,
Seems like your mouth is not connected to your brain,
X Sixty Four and HT, it ain't the same,
Better have a strap, Intel, simple and plain,
Put your FSB on the table, let's play the game,
Heard you so long, you be up to take the pain,
I don't wanna hear what you meant, do not explain,
As you lose your market share, say my name.
Jesus said to his disciples: "If you don't have a sword, sell your cloak and buy one" - Luke 22:36
Intel has three fabs ramping to 65 then 45 nm
Intel has always had a process technology advantage over AMD. That never stopped AMD from shipping competitive products. 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 - something that they just couldn't do in the early Athlon days.
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.
nothing on the horizion for 2 more years
K8L, for one. Dual-core Turions. 65nm in 1Q 2007. Quad-core in 2007.
two years worth of products that handily defeat anything from AMD
Ah, another Intel Conroe fanboy. While I'd agree that Conroe is looking quite good, note that Athlon 64 is not sitting still. Even a simple die shrink may allow AMD to put out 3.4-3.6GHz parts, which would be quite competitive with what we're currently seeing from Conroe.
I would certainly hope that Conroe has a performance advantage over AMD64, though. No desktop or server part that Intel has put out in the last two years has been competitive from a performance standpoint with Athlon 64. The dual-core Xeon parts are a joke (and everyone in the industry knows it), the Pentium D gobbles down power and can't match Athlon 64's performance at half the wattage, and even Intel's low-end Celeron D is killed by the cheaper Sempron.
It's only rarely about performance anymore. Most PCs sold do absolutely nothing 95% of the time. It's about power usage, availability, the strength of the chipsets and the price of the chipset and CPU.
AMD chipsets are cheaper than Intel chipsets. Semprons are cheaper than Celeron Ds. Unless that changes, AMD is going to continue to destroy Intel's marketshare in the low-end and mid-range PC business. Only Dell is keeping Intel alive in the low-end market now.
Take a look in any retail store. You see more AMD than Intel. That has never been the case before - AMD has never had this kind of shelf space. They've never had this much fab capacity. They've never had this much acceptance in the corporate world.
That alone should have Intel very, very worried.