I was writing a post on Intel's Q4 results which I had titled the first body blow. However, I wanted to post this real quick so you'll get #2 before #1.
(#1 is now posted below)
http://biz.yahoo.com/ap/070122/sun_intel.html?.v=4
http://biz.yahoo.com/rb/070122/intel_sunmicrosystems.html?.v=1
While this doesn't help Intel very significantly in terms of revenues, share or margins - it is a psychological win for them. What this does is reduces AMD's server revenue which lowers their profits/margins and hence the cash they can invest in other areas. As I said before, AMD is using it's server profits to invest in other areas.
So AMD is burning capacity supplying Dell with deeply discounted parts while losing critical server business to Intel. The boys in green are probably turning red.
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7 comments:
after years of bashing intel's itanium and xeon product line, Sun's server sales it must be really bad and haemorrhagic for it to eat crow and adapt Intel.
If anything this is just a sign of how strong the demand is now for the new Xeons.
i expect Sun to go 100% in return for its marketing push.
This really needs to be put into perspective with Sun's current sales numbers, or it means absolutely nothing.
For instance, it could mean Sun has more demand than it can meet, so it's also going to use Itanium.
It could also mean that Sun is no longer garnering enough demand, so AMD is switching volume away from Sun to larger volume players, and Sun has to make up for the gap.
However, it could also mean what you actually implicate it means (which I don't doubt, but simply think is not the only possibility).
Looking at it in light of AMD's Q4 results, Opterons don't seem to be selling that well. Sun needs to offer its customers a choice. Sun itself doesn't seem to be doing too badly as there are a few positives in their Q4 results.
I'm sorry but you are really reaching if you see this as a body blow for AMD. This doesn't surprise me at all. I would imagine that Sun has potential customers who want Intel hardware and Sun would be foolish not to accomodate them. I just don't understand why you try to read more significance into this than there actually is. What you should take from this is that there are still customers who are exclusively Intel. There is no psychological change.
S, if you actually look at AMD's q4 results, Opteron demand was completely flat, which is normal, because despite being a time of year when processors sell extremely well, it's not like you're going to be buying someone a rackable server for their business as a Christmas present (since 'tis the reason for the season). As such, it could also be that Sun doesn't feel it can make substantial enough margins on Opteron systems due to the decrease in Opteron pricing.
I'd also like to correct my previous statement, as I meant to say that it could mean SUN is using Xeon to meet extra demand.
Greg - you missed something. Q4 is a big quarter for enterprise too. Because IT departments must spend their budgets before FY end.
I'd suggest you all read Jonathan Schwartz's blogon this:
http://blogs.sun.com/jonathan/
Sun is quickly dying. Their switch makes little difference.
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