Intel Inside - Like It Or Not

Scott Reeves  Jul 16, 2008 1:30 pm

Intel Inside - Like It Or Not
 
EU charges chipmaker with antitrust violations.
 

 
The Wall Street Journal reports that the European Union plans to file new antitrust charges against Intel (INTC), alleging that the chipmaker gave computer retailers incentives to use its chips and not to sell PCs with chips produced by competitor Advanced Micro Devices (AMD).

The simple student might ask: if true, isn’t that cut-throat marketing and doesn’t the consumer benefit?

Previously, the EU charged that Intel’s decision to offer large discounts to Intel-only shops violated its monopoly laws.


Intel says the EU’s case is based on complaints from rival AMD - not consumers. AMD filed a complaint with the EU in 2000 and a second complaint in 2006 alleging that electronics retailer Media Market agreed to sell computers using Intel chips in exchange for undisclosed payments. Intel notes that the EU’s Statement of Objections isn’t a finding of anti-competitive actions.

However, Intel’s subsequent decision to cut chip prices across the board ended what some have called “most favored Original Equipment Manufacturer” sales tactic. The chipmaker’s old pricing practices also raised questions in the U.S. and Korea.

The decision to cut prices across the board hasn’t hurt Intel’s earnings. The chip maker’s second-quarter income surged 25% to $1.6 billion, or $0.28 per share, compared with $1.2 billion or $0.22 per share for the same quarter a year ago. Analysts expected Intel to earn $0.26 per share.

Intel’s second quarter sales grew 9.1% to $9.47 billion, beating estimates of $9.33 billion. North American sales rose 8.9%, European sales increased 17% and Asian sales rose 7.8%.

Intel says it expects third quarter sales of $10 billion to $10.6 billion, with sales of chips for laptop computers overtaking desktop sales for the first time this year.

Intel is the world’s top producer of microprocessors, the electronic guts of personal computers. It grabs about 80% of the market. In addition to AMD, competitors include Texas Instruments (TXN) and Samsung Electronics.

PC makers Dell (DELL) and Hewlett-Packard (HPQ) are Intel’s biggest customers.
Rate this article:  (0 Votes)
Comment (1) See All Comments »
07-16-2008, 11:17 pm
Amd then lose it back because they have problems and Intel then came out with better products?

So, isn't new better products determine market shares?
Read More
discuss this article and more on the mv exchange
No positions in stocks mentioned.

Get real-time options trading ideas from Steve Smith, veteran options trader and newsletter author, plus let him show you the way to cut risk and boost your returns through the strategic use of options.  Click here for a free 14 day trial to OptionSmith by Steve Smith.



The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2009 Minyanville Media, Inc. All Rights Reserved.
Ticker Talk
Popular Tickers:
F »AMZN »HIG »
Select
  •  
Talk Now
Share this Talk on your site:
Send us your feedback

Our Professors

rss article alert