Intel's financial explanations are odd

INTEL ANNOUNCED LEANER times than usual, or at least less fat times than the Wall Street loonies were expecting. The short story, here, is that there are two problems, a chipset shortage and bad desktop sales. Neither excuse washes with me.

The first one is the chipset shortage, and I don't buy it for a second. On the surface, it sounds good, Intel does slip up a bit here and there, every company botches a forecast now and again. The problem here is that this botch is several quarters long, you can read some of it here here here.

Why am I bitching? Intel is better than this, and 4-5 months is plenty of time to shift schedules around and get chips out of the factory. That process normally takes 3 months or so to go from wafer in to things with pins on them out the door, so Intel has had months more than needed to make any changes. Something more is wrong here, and their explanations only hold true to the most cursory of investigations. Moral, they are better than this, something is going on here, and bad planning is not it.

The other part is poor sales, blamed on the Asian market, poor upselling at the non-denominational winter holiday season, sunspots, and termites organising into a union or something. What it comes down to is that they came up short in chip sales. The excuses, often blamed on weak Q4 sales don't wash either, AMD, selling into many of the same markets, had a banner quarter, all the bitching we heard from them was about product shortages.

Little birds, not the kind brought on by hard drugs, have told the INQ that AMD is already sold out completely for Q1, and Q2, seasonally very weak, is not looking all that bad either. I would guess that when AMD reports for Q4 and Q1, things will look quite different from Intel's outlook.

So, we have two explanations from Intel that don't make much sense. Something is very wrong, and there are no obvious answers other than competition fromm AMD. If this carries on for a quarter or two more, then the answer will be clear as day. Watch the margins, the traditional ways out of this are to use incentives and kickbacks, and those tend to show up in the numbers sooner or later.

Intel will be in a much stronger position in Q2 thanks to Bensley, and stronger yet in Q3 with Merom et al. Relief is on the way, and with a deft PR program, it will be more or less be written off and forgotten. µ