Intel thinks AMD has chips swilling in the channel

THE CHARMING MELANIE introduced Intel's analyst conference call yesterday evening, with Paul Otellini and Andy "Growler" Bryant taking the stage and batting off questions from the financial analysts.

Melanie has such a nice voice but not one of the 98 per cent of male financial analysts thanked her for her charming introductions, so let's give her a round of applause because no-one else did.

Intel turned in increased net profits last night, as we reported here.

Paul Otellini, Intel's CEO said that pricing will carry on being competitive in the second half of this year. But, he said, the best defence against that is better product. Intel Penryn and 45nm are coming up and in any case pricing competition is more targeted at low end of desktop and somewhat in notebooks, he said.

AMD, will continue to sell aggressively but on the high end will put less competitive pressure on Intel.

The channel appears to love Intel, according to Otellini, which probably isn't very good news for AMD, because he said later that his perception was his competition has more inventory hanging around in the channel than his firm has.

Said Mr Channel had a good quarter and Otellini's channel customers tell him they're making "very good margins" on our products. Intel will show off parallel processing based on Silverthorn and Larrabee cores soon enough.

Intel did better than expected selling desktop chips in the channel, but the bulk of those are in emerging markets, not in the USA nor in Europa.

Otellini said Intel "has no intention" of walking away from any segment of the marketplace. He said that in 2008 the company will have a significantly lower cost structure and "you'll continue to see us engage where we think its prudent." He expects some erosion in server average selling prices because DP will outgrow the MP sector, accelerated by the ramp of quad core DPs. He said that trend along with virtualisation are the ones to watch in the second half and even into 2008.

He believed Intel would extend the lead it has over AMD in power efficiency as it rolls out 45 nanometre products. He said Intel was already sampling all versions of the 45 nanometre products already.

Intel is shifting all of its advertising from branding to concentrate on Centrino "almost entirely". That will hit "real hard" in the second half in August, starting on the web and going to television.

Andy Bryant said that while Intel would find some more efficiencies in costs in the coming year, he doesn't have another $600 million rabbit in his hat.

And so Melanie bid all the grumpy financial analysts and the Intel execs a mellifluous farewell, with the only gentleman there present being director of investor relations Mr Kevin Sellers, who had the grace to thank her before Chipzilla pulled the plug. µ