Intel Dipped To Three Year Low

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Intel Dipped To Three-Year Low

By: David Utter
2006-06-08

Increased competition from bitter rival Advanced Micro Designs and Microsoft's delay in shipping the new Vista operating system have not helped Intel's stock price.

Intel Dipped To Three-Year Low

Will the Woodcrest processor from Intel (INTC) lead Intel out of the woods? The company needs something to inspire its investors, who may be viewing the company as a monolith weighed down by its size.

Intel closed yesterday at 17.39, and ECN noted that it lost another 2 cents in after hours trading. Shares of Intel traded for 17.33 approximately 30 minutes before the markets closed, a price that MarketWatch noted as a three-year low point for Intel stock.

Advanced Micro Designs (AMD) has made gains on Intel in the server market. Corporations worldwide purchase a range of servers to power their business needs, and lately those buyers have been opting for hardware with AMD chipsets in greater numbers.

Each win for AMD is a loss for Intel, and that zero-sum game has shifted the marketplace. Dell Computer has been a long-time bastion of Intel hardware, but even the decision makers in Round Rock finally realized that in the face of vicious competition, it was time to embrace AMD for some of its server line.

Intel's opening gambit for remaking the business has led to talk that it will shed its interest in making chips for the communications sector. The MarketWatch article pointed out how this will take Intel out of the faster-growing market for mobile devices and leave it at the mercy of the PC market's vagaries.

Microsoft's continued delays at shipping its next generation operating system, Windows Vista, removed any chance of Intel benefiting from holiday sales of new PCs with the OS this year. Microsoft delayed the consumer release until 2007, although volume license customers will see Vista before the end of 2006.

Rumors have been flying around the Internet that one part of Intel CEO Paul Otellini's strategy at remaking Intel will involve laying off part of its workforce. As many as 16,000 jobs could face the chopping block if Intel revisits the strategy it employed after the dot-com market crashed five years ago.

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Tags: Intel, AMD, Dell, Microsoft

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