So, is it good news for consumers or bad news for Intel employees. Hmmmm. According to Bloomberg.com, Intel is just responding to competition in the marketplace.
``Intel is fighting back,'' Ray Chen, president of Compal Electronics Inc., the world's second-largest maker of notebook computers, said yesterday in an interview. Such competition ``means the consumer will get the benefit and the unit price will get lower so we can stimulate demand.''
There's a lot more to this story.
Intel's share of the processor market dropped to 74 percent early this year.
Advanced Micro Devices last quarter increased its share of the $35 billion computer chip market to more than 20 percent for the first time in more than four years. Intel Chief Executive Officer Paul Otellini forecast the company's first annual sales decline in five years and Dell Inc. decided last month to buy some Advanced Micro chips for the first time.
In fact, Dell ended it's exclusive 22 year partnership with Intel with that order from Advanced Micro Devices. Intel is hitting back hard.
Deep cuts by Intel may have a broad impact and hurt sales at distributors that market chips for manufacturers, said Patrick Moorhead, an Advanced Micro vice president for marketing. Moorhead who works with distributors and customers worldwide.
``Knee-jerk pricing reactions like this wreak havoc,'' said Moorhead, who worked at Compaq Computer Corp. before joining Advanced Micro. ``These are desperation moves. I've been in the business as a customer of them and competing with them. I haven't seen this type of behavior, it's like a cornered animal.''
Cornered animal or no, this could have significant impact on a variety of industries, both inside and outside of the computer industry.
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