Saturday, May 26, 2007

World's thinnest notebook

Not bad - though the strap makes it look a bit too much like it's designed for women IMHO:

World's thinnest laptop

Thursday, May 24, 2007

Are the Doctor and I the same person?

Ok - since you guys are pushing me, here's the truth about whether Sharikou and I are the same person. We're not - what we are is a genetic experiment by a secret government agency investigating the effects of creating the psychological and intellectual anti-images of a person.

The theory in question here is to test the fundamental nature of human interactions to see whether humans are basically intelligent or you know (psssst - like him) and hence gravitate to a virtual social interaction of like minded organisms. Unfortunately, he's winning as you can see from the number of comments on his web site.

Nooooo!!! - of course we're not the same person. For goodness sake's man - do you think I would be able to retain my sanity if I had to write that drivel and that too with such poor command of language and sentence structure. If I could maintain two such faces for so long old boy, I wouldn't be out here writing this blog. I'd be President somewhere.

Barcelona - game over?

Read these two articles on Uberpulse (thanks Anonymous for the link):

8 Intel cores faster than 16 AMD cores

Barcelona recent lack of performance and why AMD should start to worry

It is extremely concerning that AMD continues to be unspecific about the Barcelona launch date (I mean come on...we're a few days short of mid 2007) and the absence of samples for the tech press to do independent benchmarking persists.

Tuesday, May 22, 2007

Penryn will massacre Barcelona

AMD did another sealed demo of Barcelona where the press couldn't inspect the systems. They ran POV-Ray and Barcelona was able to do 4000 pixels.

An anonymous reader sent in this link (thanks) showing how existing Intel Xeon's can best that.

Link to Yahoo message board

Barcelona can't even compete with Intel's existing products. It will be history when Intel introduces Penryn. AMD will bleed money like water this year. If Barcelona can't give Penryn a fight, AMD could lose another billion $s through the rest of the year. I'm still waiting for proper Barcelona benchmarks so that I can make my forecast.

Intel dumps flash business

I had discussed how Intel should/would dump it's loss making flash business some time this year way back in Q3/Q4 last year. It's finally happened.

Intel JV with ST Micro

This will add back 5-10 cents to their EPS in 2008 (assuming deal closes late 2007) and will also boost their gross margins.

It boggles the mind - Part 2

A few days ago I had written part 1 of this post about how Doug Freedman at American Technology Research (ATR) had made a buy rating on AMD as a result of his belief that AMD will now lose a little less money than he had earlier anticipated. I then heaved into the credibility of the Wall Street hacks. I thought I'd have a look at Mr Freedman's track record to make my point:

January 12th, 2007 - - Mr Freedman releases a report headlined...

Advanced Micro Devices, Inc. ($20.18, Buy)
(AMD: We Think the Bottom is Near; Street Numbers Likely Move Close to Our Preview)
Investment Opinion: Maintain Buy rating as opportunity presents itself; we are active buyers at $18.

His EPS projection for FY07 is +77 cents (down from +80 cents) and his 1Q07 forecast is +10 cents (down from +11 cents).

January 24th, 2007 - Mr Freedman next releases the following report...

Advanced Micro Devices, Inc. ($17.51, Sell)
(AMD: Extreme ASP Erosion Leads to Disappointing Gross Margin Results and Outlook)
Investment Opinion: We are downgrading from Buy to Sell and reducing our price target from $27 to $12

His EPS projection for FY07 is now 7 cents (down from 77 cents) and his 1Q07 forecast is -22 cents (down from 10 cents).

His opening para in that report would have got most regular people fired but I guess Wall Street has different rules:

"We have clearly been wrong over-weighting the fundamental market conditions and have missed the bold fact that both sides are simply growing units at the expense of ASPs."

(Which is hogwash considering Intel's ASPs rose in Q406 and are holding stable still.)

April 9th, 2007 - in his next report Mr Freedman now proclaims...

Advanced Micro Devices, Inc. ($12.86, Sell)
(AMD: Is This A Sign We Hit Bottom? We Wish It Was - But Still Need Cash)
Investment Opinion: We maintain our Sell rating and $12 price target as the
company still needs cash to compete.

His EPS projection for FY07 is now -83 cents (he has removed his previous numbers from this report) and his 1Q07 forecast is -34 cents (previous number removed).

April 16th, 2007 - here we go...

Advanced Micro Devices, Inc. ($13.57, Sell)
(AMD: Pre-announcement Leads to Numbers Cut; Reinforces Need for Cash)
Investment Opinion: We maintain our Sell rating and $12 price target as the
company still needs cash to compete.

His EPS projection for FY07 is now -$1.82 (down from -83 cents) and his 1Q07 forecast is -82 cents (down from -34 cents).

April 20th, 2007 - he now says...

Advanced Micro Devices, Inc. ($14.28, Sell)
(AMD: "Something of a Perfect Storm" Hits AMD Results)
Investment Opinion: We maintain our Sell rating and $12 price target as the company faces an uphill battle against a revitalized 45nm wielding Intel.

His EPS projection for FY07 is now -$2.41 (down from -$1.82) and 1Q07 comes in at -$1.01 (against his final forecase of -82 cents).

May 14th, 2007 - we finally come to the report which started my tirade...

Advanced Micro Devices, Inc. ($14.68, Buy)
(AMD: Upgrading to Buy from Sell, Time for a Tradable Rally)
Investment Opinion: Upgrading to Buy from Sell and increasing our price target
to $18

His EPS projection for FY07 is now -$2.27 (up from -$2.56) and 2Q07 forecast is -73 cents (up from -89 cents).

So back to my rant. How on earth does anyone buy on the predictions of these analysts??? The same guy has gone from a Buy at $20 to a sell all the way down to $13 and has catalysed a short term uplift for the stock by creating a Buy rating at $14.68. His EPS estimates have consistently been off. His ratings are just whacked. From a Buy at $20.18 going to a Sell all the way down to $12.86 and becoming a Buy at $14.68. I thought you were supposed to buy low and sell high. Someone needs to inform Mr Freedman that his job is give his clients the info to do this.

Now I know you can't always get it right. But come on...this is the job for which Mr Wall Street gets paid millions of $s. And the basis for the last recommendation to buy till $18 just amazes me. As far as I'm concerned, these guys are mostly a bunch of quacks or simply duping average Joe's who blindly follow the recommendations of the so called Pundits of Wall Street.

Friday, May 18, 2007

Barcelona schedule in flux

It seems like the Barcelona schedule may again be pushed out to August or September with bugs still being uncovered:

AMD Barcelona launch schedule up in the air

This is not good news for AMD. And if this happens then the confidence of not just the ODM guys in Taiwan and China but also the OEM manufacturers who are building their server SKU line ups for 2H will be shaken. Which would result in cancelled orders for AMD and most probably those orders being moved to Intel. Who it appears are doing a bang up job of managing their product launch schedules and have been beating those schedules over the last 9-12 months.

It now seems highly unlikely that Barcelona will have any kind of impact for AMD in 2007 and with Penryn most likely to launch in Q407, it appears they are giving away any window of opportunity they may have had with Barcelona.

Right now, it seems like Intel's tick-tock is the sound of impending doom for AMD.

Thanks to Anonymous and Sheepshagger for the link.

Thursday, May 17, 2007

Ha Ha - I can't stop laughing

For the ardent followers of Fudzilla - read this and weep:


There's a reason that site is called Fudzilla. FUD = fear/uncertainty/doubt.

All pillars of journalism beyond reproach.

As I had said, Intel will accelerate their quad core ramp by dropping prices. This is now confirmed:


By bringing quad core down to an entry point of 266$, they will be placing immense pressure on AMD to put their latest and greatest product at a competitive price point. Now of course AMD would like to enjoy a premium on their K10's for 6 months or so while product is scarce. However, Intel's price move coupled with the arrival of Penryn means they must do the following:

1. Have competitive pricing which results in them being able to not command as much of a premium for their new flagship technology.
2. Accelerate their own quad core mix which has implications all the way down to the factory floor.
3. Put additional resource behind Barcelona to make it successful which means lower focus elsewhere.

I think AMD made a mistake letting go of sales guys in their recent lay-offs. First, they will need every sales guy they can muster to compete against Intel. Specially since in their Spring Analysts Meeting Intel said they increased their sales team during the re-structure. Second - it does not help that the sales guys are working with the possibility of Damocles sword falling yet again and possibly many people inside AMD are more focussed on writing their resumes and seeking opportunities outside.

Tuesday, May 15, 2007

It boggles the mind - Part 1

Today I get to marvel at Wall Street and the investment community. Analyst Doug Freedman at ATR upgraded AMD from a "Sell" rating to "Buy" based on the fact that he thinks AMD instead of losing $2.56 per share in 2007 will now lose only $2.27.


The mind boggles at the insanity that prevails on Wall Street. The company is losing money. Essentially Mr. Freedman said instead of losing 1.2 billion $ they will lose about 900 million $s this year. Yes...LOSE!

First of all - If I were a client I'd fire him on the spot. Who in their right mind makes a buy recommendation on a company based on the fact that they will lose less money this year. At best, I can understand a "Hold" as he gets to see how Q2 and then the rest of the year starts to turn out. But knowing that he will be making another call in 2 months post the Q2 results, it's the act of sheer greed that drives this community that allows them to make recommendations like this.

Based on this news primarily (I'm assuming these guys are not stupid enough to drive up the price because they announced the Phenom brand name), the stock is up 4.5% as I write.

I told you a couple of days ago why Johnny Wall Street was eager to drive up the price. So they can artificially boost prices to tempt ordinary Joe's into the market and recover the losses they made buying AMD at 20$ +.

I mean really, they should make these guys back up the trades they are making with their clients money with their own too.

Well - what can I say. Imagine driving up the price of a business that's going to lose money. If it stinks like a dead fish - it probably is and I'd skip straight to desert.

Friday, May 11, 2007

AMD lay offs

As I had predicted, AMD has laid off 430 people or as they say 2.6% of their workforce.


However, this is probably not enough and they will need to bring their employee base down closer to 15k people from the 16.5k they had post the ATI merger very quickly.

AMD also filed their 10Q today. While we already calculated the true loss to the CPU biz, it also reveals a 10% decline in ASPs.


AMD management is handing out some blatant horse's manure. At the analyst call they said inadequate supply to channel and that the Q1 inventory build up was desired. Huh - if they had inadequate supply, why is it Q406 inventory was stable at the same level compared to the period when AMD was selling out and make solid profits. You can read more about my assessment on the inventory:


Essentially, AMD is seeing soft demand because they have non competitive parts and by pulling the Pentium brand down the pricing stack Intel has made it difficult for them to sell even when they are almost giving the product away for free.

What baffles me is how the Wall Street hucksters continue to prop the stock up at 13.50+. But I guess the guys who bought at 40 have no choice but to pour good money after bad to try and keep their investments afloat for as long as possible.

Q2 - expect AMD to lose a big dollop of change again. Not as much as Q1 but probably half or a little more than half of their Q1 loss.

Tuesday, May 08, 2007

Silverthorne - Intel's silver bullet

Check out this article on Businessweek.

Both the analysts and the press are failing to realise the true value of Silverthorne. A SOC that's as powerful as today's computers at a fraction of the size and power consumption but most importantly ridiculously cheap to manufacture. At 2500 chips per wafer which is roughly 10x today's CPU's, Intel is basically able to manufacture Silverthorne at 1/10th the cost of say a Conroe CPU today. I know this is a gross over-simplification but I'm just approximating here to set the context. Let's assume a Conroe CPU costs anywhere between 50-80$ to manufacture. Hence, Silverthorne could end up costing as little as 5-8$ to manufacture. So even if Intel sells the part at 30-40$, that's a really sweet profit and some awesome gross margin.

Now think about all the places you could put a small, low power, high performance IA CPU:

- Ultra mobile PC's
- MIDs - the new devices Intel is touting.
- Consoles
- Handheld gaming devices
- Education devices for developing countries.
- Cheap PC's or laptops for emerging markets.

Man...the possibilities are phenomenal. Now consider the tremendous pricing advantage Intel will have. No matter how much AMD cuts prices, they can't win if Intel has a part where they turn a hefty profit even if they sell at AMD's cost price.

What Intel is creating here is the Toyota Corolla of the CPU market. Affordable, reliable, reasonable performance and fantastic value for money. They finally figured out that's it's not enough to trim headcount and operating expenses to bring down costs. They must have a true low cost part and not keep down-selling their best technology by reducing cache or removing features and selling it as a Celeron. The low end of the market is a reality and to win it, you must build the right products and brands for it.

If the analysts thought Otellini was only referring to re-structuring when he was talking about profits growing faster than revenues at the analysts meeting last week, they missed the point completely. Silverthorne if handled right will bring awesome profits even if it doesn't grow revenue at the same proportionate rate as the traditional CPU biz.

Hector and team instead of borrowing money and still shooting for 30% market share should be reducing costs and trimming headcount. They are too far behind Intel in terms of products for where the market is going. Barcelona will not save them this year as it will really begin to impact the financials next year...and Penryn is looking pretty good too. Intel is flanking them from all sides - product, manufacturing, cost and just plain old managing the business.

Expect AMD to lose another 500 million or so in the next two quarters.

Wednesday, May 02, 2007

I re-named the blog

Today, I decided to re-name the blog after living with Sharikou 180 for around 8 months. I thought something a little grandiose would be nice. What do you guys think...?