the time has come, page-4

not looking good hehe


http://www.theage.com.au/news/breaking/intel-profit-plummets/2006/04/21/1145344247960.html

Intel profit plummets despite new Apple link
Email Print Normal font Large font April 21, 2006 - 10:03AM


Intel has posted its biggest drop in quarterly profits in four years. But the computer chip group might have lagged further if not for an unlikely alliance with Apple, which this year switched to Intel chips and has reported another blockbuster quarter.

Despite their new connection, the two Silicon Valley stalwarts have anchored opposite ends of the business cycle in recent months.

Intel's profit fell 39 per cent for the first three months of the year as it fought intense competition from rival chip maker Advanced Micro Devices.

Apple, meanwhile, enjoyed a 41 per cent jump in net income as sales of its iPod media players barely missed a beat. Apple's profit in its second quarter, ended April 1, was $US410 million ($551 million), compared with $US290 million a year earlier. Earnings were US47c a share, up from US34c a year ago.

Sales rose 34 per cent to $US4.36 billion, slightly below the Wall Street consensus estimate of $US4.52 billion.

The changing fortunes of Intel and Apple illustrate the vagaries of the tech economy.

"In Silicon Valley, in general, you can have what seems to be a huge winner, but that changes very quickly," said Michael Cohen, research director for Pacific American Securities. "Apple is a great example. At one point their stock was ripping and people thought they'd own Silicon Valley. Then along came cheap IBM clones and scuttled the company. Now along comes the iPod and brings them back from the ashes.

"Intel's really the reverse," Mr Cohen continued. "People think they're an invincible entity and along comes AMD and shows them they're not the only one who can make high-end microprocessors."

Intel, which for years differentiated its semiconductors with the "Intel Inside" campaign, has increasingly seen its products regarded as commodities, giving AMD an opening to pitch its high-end chips to computer makers. Apple, by contrast, has kept its products fresh by constantly juggling the line-up of iPods and adding new features.

Over the past three years, Apple shares have risen tenfold, while Intel shares have barely budged. Apple shares gained 4 per cent in after-hours trading following the earnings release. They fell US57c to $US65.65 during regular trading. Intel rose about 1 per cent after climbing US16c to $US19.55 during regular trading.

Although Intel remains the world's largest chip maker, powering more than 80 per cent of computers, first-quarter earnings fell to $US1.3 billion, or US23c per share, from $US2.15 billion, or US34c, last year. Revenue inched down less than 1 per cent to $US8.94 billion.

Intel's earnings were affected by a change in accounting rules requiring executive stock options to be treated as an expense.

The Los Angeles Times