http://liliputing.com/2014/04/lilbits-4-15-2014-intels-mobile-struggles.htmlAnd yes, I yanked all earlier comments about Intel based on what they just released for their last quarterly returns for this year and for the full year just past.
Why? Because I just can't believe it is really that bad.
I used to like and respect Intel, but now that can no longer be the case.
Bay Trail is the very best tablet chip Intel has come up with to date and it isn't very good for phone or light tablet uses, 10 million of them (and assorted cousins) have been produced on Intel processes and shipped just this last quarter to warehouses at a first quarter booked "cost to produce" of $928 million dollars, with a proposed revenue value of only $156 million dollars.
That would be a loss of $77.20 per chip produced and warehoused IF you could indeed sell them for $15.60 a piece, but you cannot get $15.60 because the competitive priced (and more versatile) ARM product sells for around $5.00 each. So Intel is going to have eat another $10.60 eventually to go with the $77.20 that they have already booked.
In 2013 Intel lost 3 billion dollars in 2013 just on the small amount of mobile tablet business they got last year. They paid out
all the profits from all of their other businesses and then some to accomplish this feat. And this year they want to do ten times that much "at loss" business?
Why? Just so you have an explainable loss and owe no taxes to Uncle Sam?And Intel still has no phone chip yet at all.Put your calculators up, do not do the math, do not calculate any loss per chip because there was also a hidden massive buy back of stock by Intel to support their public image that accounts for a goodly bit of that apparent gross loss differential.
Let it sit there, quietly, please. The information is flawed somewhere.
I don't even want to know about the rest of it. The reported buying back of supposedly 22 million shares of common stock to manipulate/support the public stock price, the vapor product names switching features and lithography sizes in and out, the large repeated product delays, the loss leader pricing in excess of any sanity or any of the rest of it. Let Oz stay behind the curtain, he's too short, fat and ugly to look at.
Here are the simple facts going forward.
Intel faces real competition now in the tablet slot that they currently occupy from the production-wise much bigger, much larger sales, larger real dollar revenue making MediaTek and Allwinner (and the smaller Rockchip) who will make equivalent or better fully integrated multi-use tablet and/or phone ARM based chipsets selling them at a true profit at the same price point where Intel will be strongly loss-leadering their Bay Trail and Merrifield non-integrated tablet only products. Using Microsoft OS isn't any form of advantage here, all this dealing will be done as Android standard products or else as same-same MS OS products, with the OS playing field is fairly level at this point in time either way since both Android and MS OS is free at this point in time.
And Intel is apparently willing to paste stacked Andrew Jacksons (3-4 of them?) on top of each tablet chip they have made so far to do this, not just the 50 cent pieces as was earlier thought.
This can't be right .... nobody could do that and be allowed by their stockholders and their Board of Directors to keep their jobs.
Not unless it was totally a "do or die" situation that makes it necessary.
And it isn't do or die, IBM and Texas Instruments both made the correct decision not to go into that mobile chipset business space at such a terrible terrible price disadvantage. Both survived just fine, and yes they both shrank accordingly but in a healthy understandable pattern. Intel is shrinking too, but is still hemorrhaging blood money out the nose in a fountain spray just to be in this business
at all.
Something in what is currently being reported just can't be right --- right?
It can't all just be ego, can it? It all can't be tax manipulation either, right?
Right?
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http://www.digitimes.com/news/a20140414PD201.htmlIntel must have a key to the Obama money printing facility, they have just dropped off a supposed $100,000,000 "technology help package" slush fund to "help" the smallest of the Chinese white box tablet makers to get them to use the Bay Trails that Intel will sell them at less than $5 each (less than Rockchip's best normal prices).
This is clearly dumping (selling products below cost in selected markets) and leaves Intel open to litigation from their other chip customers.
Also, the Chinese government won't sit by and watch Intel destroy part of their basic electronics industry for very long.
Prediction, after carefully waiting until the "technology help package" slush money dries up, dumping charges by Chinese chip manufacturers causes China to stop allowing the shipping of disruptive Bay Trails into their country. Without a customer, Intel stops producing and selling Bay Trails at a loss.
Intel becomes a small legacy/hobbist chipset manufacturer like Texas Instruments and IBM.