How many chips does it take to sink an Itanic?

THE WORLD OF ITANIC finance is a strange place, filled with accountants skilled at doublespeak and other nefarious skills.

You can spin a set of statistics just about any way you want, and make it fit any set of PR goals you need. Take Itanium sales numbers for instance. I asked Intel about it, and they would not confirm, deny, or offer anything close to them. The question was 'how many Itaniums have you sold', and the answer was a punt to IDC numbers.

The first set of hard numbers I got was from earlier this year. That indicated that Intel has sent 220K of the not so little beasties out the door to date. OK, that is in line with the rather nebulous figures they have bandied about so far. The problem is when you ask about how many of them were sold, you get a different number, 170K.

This mind you is over and above the freebies the vendors give out. A good friend had to ask HP to stop giving them to him, the three servers he had already were not being used. Buy three, get at least one free plan in high silicon acreage chips. It seems the wheels need a lot of greasing to meet the comp, even before you get out of the depot.

Those wonderful sets of numbers tell me things are not so right in Itanic land. The burning question on everyone's mind is not if, but when the plug gets pulled. A long conversation with a very knowledgeable insider came up with a really interesting set of numbers. While it is speculation, it is very informed speculation.

It will come as a shock to absolutely no one that the entire IPF program is in a financial hole, a very deep one. Intel wants out, the program has accomplished its goals, kill off SPARC and other proprietary RISCs, and now it just loses money. If you pull the plug now, you end up with a huge loss on the books, and from what I was told, Intel wants to avoid that at all costs. The goal is to break even, accounting-wise, and then let go.

So, what numbers would put them there? A bit ago, the magic number was two million units sold, give or take up to nine. That was a long way away from the current state of affairs, so something needed to be done to speed up the process. Enter HP, stage left.

It seems when Intel bought out the HP Itanium folk, they did some serious accounting Ninja work. Those wacky beancounters beat the books until they positively sang, and with the cash, liabilities and other things that flew back and forth, the magic number was lowered. As it stands, we are now told that it is about one million, or half where it was.

When that is reached, IPF can fade beneath the waves and not put a dent in the stock price. Moral of the story, Itaniums are selling at about 25% off, and only 750K left to go. Buy a bunch, give them away as graduation gifts, father's day presents, and use them for turkey stuffing if you must, but just buy lots. µ