Revisiting The Blue Camp

Seriously time flies in the tech world, in just a matter of months netbooks seems to decline while tablets and smartphones are picking up like hot cakes. In addition we can clearly see that Intel's Atom is not making inroads either in the Consumer Electronics (CE) market: smart TV.

Then we see that Intel's Ultra Mobility boss leaving the company after a long tenure of 24 years! With the growing interest of tablets and smartphones these days, long gone are the glory days of the Atom. Smartphone market is mostly dominated by ARM processors and the tablet market is going to be trampled by AMD's Bobcat fusion line of processors when they are finally out this summer'11 after some delay.

"AMD Brazos has been a big hit with OEMs as nearly every major manufacturer is producing machines based around it, particularly the extremely popular E-350 APU."

It is rather obvious that Chandrasekher had to go because of Intel's failure in the mobility segment of tablet/smartphone. Perhaps he was fired since the announcement made was so brief without much explanation. According to tomshardware, it wasn't even seven lines long. So much of disrespect for someone who has served Intel for so long.

So what is Intel going to do with Atom? Some of my thoughts:

• Heading towards making it more energy efficient and cheap to compete with ARM. "Moorestown" is rumoured to be offering a x10 power reduction during idle state.
• Bringing it into the low-power server space because ARM has openly said they are going up the pyramid and tackling low end/low power servers with its architecture. This has been confirmed recently. News here.
• Competing with Bobcat in which Intel responded a YES they can but with what? Lol. The current iGPU in Pineview is inadequate (fails @ HD flash and HD video encoding) and has been no word on further technical roadmap to combat AMD's upcoming and real threat.

Thus it remains extremely gloomy for Intel to penetrate yet another new market, they have to be content with their microprocessor product line which is doing very well (fast refresh), thank god they command this market strongly. Intel in this segment is a free frag until AMD's fusion Llano and Interlagos is out in Q3'2011 to provide some competition.

 

Though critics may argue that Intel in 2010 generated revenue profits, it did not translate to share performance, it is mainly due to low base effect in 2009. Low base effect in economics is the tendency of a small absolute change from a low initial amount to be translated into a large percentage change. I am certain that in 2011 it will not fair higher nor close to 2010 profit.

The last time (27 Nov 2010 posting) I placed a sell call near USD 21.50 was justified as the share is now at USD 20.37, a 5.2% depreciation while buy call for AMD has gained 20.32% from USD 7.38 to USD 8.88 (nice digits!)

I still maintain my sell call for INTC above USD 20 (and buy some other equity) and buy call for AMD as long below USD 10.

Here is my previous analysis on INTC: Blue Machine - Intel Corporation