Intel Walking Away From Low-End Business
Both AMD and Intel were able to command good prices for their chips in the last quarter. Prices were up for AMD, and at Intel they were better than expected, which is to say for Intel, prices did not go down.
A Very Selective Approach
One reason for the favorable pricing surely is that Intel is letting up in the price war that it and AMD have been waging for the past year or so. Intel reported that it recently “walked from a lot of low end business on the desktop and the notebook at prices that we just didn’t think made sense”.
Intel will continue with “a very selective approach”.
Price Erosion in Desktop Reversed
Intel had expected overall pricing to be down but instead it came in the same, which was good. However, pricing for desktop CPUs and chipsets was up.
These better-than-average prices for desktop chips reversed a downward trend. Desktop “is where much of the ASP [Average Selling Price] erosion in the last year, year-and-a-half had occurred”.
One of the reasons desktop prices were up in the period was that more quad-core processors were sold in desktops. Quad-cores tend to cost more than dual-cores (they also cost more to make).
The CEO’s Glass is Half Full
If pricing for desktop chips was up, prices for mobile processors, on the other hand, was down. One reason was intense price competition with AMD on “the low end segment of the notebook market”.
And this trend of downward pricing for notebooks is not expected to end anytime soon. As “notebook volumes grow, notebook prices will come down”.
Talk about one’s glass being half full, as opposed to half empty. The CEO of Intel said that lower prices for mobile chips were “good for us”.
The reason it is good is that notebook pricing is still “a heck of a lot better than where the desktop is”.