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News Intel profits down 25 per cent year-on-year

Discussion in 'Article Discussion' started by Gareth Halfacree, 17 Apr 2013.

  1. Gareth Halfacree

    Gareth Halfacree WIIGII! Staff Administrator Super Moderator Moderator

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  2. damien c

    damien c Mad FPS Gamer

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    Maybe if they dropped the prices of the SB-E cpu's then more people would buy them which in turn would bring more profit, as I am pretty sure most people wouldn't mind paying £300 to £350 for a 6 core SB-E cpu, compared to £440 - £1000 at the current prices.


    Maybe also if they made a low priced but decent performing cpu on the cpu side of performance but also included in the cpu a decent performing gpu to compete, with the AMD APU's then they again would sell more of them.


    The pc market slump cannot be blamed for every company loosing profits, but those companies should look at how to gain more customers and 9 out of 10 times if they lowered the price they would sell more, and eventually recover the costs of developement etc or am I just mistaken.


    I also think though that the lack of games/programs taking advantage or needing more performance from a cpu is causing issues, because let's face it really at the moment gamers don't need more than a Dual Core cpu although most will be running a Quad Core, but because they are not being used by games and programs people are just not upgrading because they don't feel the need to.

    I only upgraded from a Quad Core to a 6 core simply because I am starting to more video editing, but if it was not for that I wouldn't of bothered spending nearly £1100 on upgrading my pc and instead would have had one really good weekend in a pub :)
     
    Last edited: 17 Apr 2013
  3. runadumb

    runadumb New Member

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    This part makes the rest of your comment null and void.

    They can lower the prices all they want, the masses don't care, their current rig is fast enough.
     
  4. chrisc1277

    chrisc1277 Member

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    Took the words right out of my mouth. When software catches up with hardware, only then will i start thinking about upgrading my cpu.
     
  5. damien c

    damien c Mad FPS Gamer

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    True but also some people will upgrade because they feel like it will last longer than there current cpu will, such as for me I won't need to upgrade really for along time but I will probably get the want feeling to upgrade around this time next year simply because, there will be newer and faster cpus out by then.
     
  6. runadumb

    runadumb New Member

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    Oh I'm with you, my first gen i7 920 is fine for 99% of my usage. It doesn't stop me wanting to upgrade to Haswell for the extra speed, lower power consumption,UEFI motherboard and other benefits.

    I just don't think intel lowering their prices to appeal to that percentage of the market would do damn all for their profits.

    Hey, I would LOVE to be wrong.
     
  7. Snips

    Snips I can do dat, giz a job

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    I'm still crying with laughter at that one. So are you saying this "slump" is down to AMD's APU?
     
  8. Gareth Halfacree

    Gareth Halfacree WIIGII! Staff Administrator Super Moderator Moderator

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    That's, sadly, pretty far from how profit works.

    Profit - also known as "net income," particularly when you're dealing with USian companies - is your revenue minus your costs. Your revenue is all the money you received from your customers (or, indeed, any other source, including government handouts.)

    If you take a closer look at the figures in the article, you'll see Intel's revenue was down only a few per cent compared to this time last year - but its profit was down by a quarter. If Intel dropped its prices to encourage volume sales, it would be increasing its revenue but decreasing its profit margin - exactly the opposite of what it actually needs to do. Intel needs to find a way to keep revenue stable but increase profits - either by trimming its costs by reducing headcount, finding cheaper ways to make processors, renegotiating its supply contracts, increasing yield, or by increasing the cost of its processors.

    That's exactly what it's going to do, incidentally: we're approaching the launch of Haswell, which will cost more than the equivalent Ivy Bridge chip costs now. While yields may be lower, it's fair to assume that Intel is going to be looking to make more profit on its new Haswell chips than its old Ivy Bridge chips - just like it did when it launched Ivy Bridge, making sure the chips cost enough to make a healthy profit compared to the several-times discounted Sandy Bridge equivalents. Over time, as sales drop and revenue threatens to sag, Intel will reduce the cost of Haswell chips - and, eventually, replace them with the suddenly more expensive Haswell successor.

    If Intel took your approach, it would have to go gangbusters on sales to benefit: if it halved its profit, it would have to double revenue just to make up for that loss; if it wanted to actually fix the 25 per cent dip in profits, it would have to do even better than that. Profits on the already-discounted Ivy Bridge chips aren't going to be terrifically high as it is: if prices dropped by $10 on a $150 chip, could you realistically see it selling three times as many?

    tl;dr: Intel needs to sell more expensive processors, not higher volumes of cheaper processors, if it wants that worrying graph to change direction.
     
  9. rollo

    rollo Well-Known Member

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    The market is dieing simple as that, Intel Arm and AMD have all took hits in the last quater due to lack of demand and market saturation.

    Basic facts are this, Most users do not need a 6 core cpu period they dont even need a quad core cpu.

    Duel core is still more than enough for 99% of foke out there. As all they do is facebook, Word process, or email. ( the 3 biggest uses of a pc, Gaming and photo video work is not even in the same % of uses)

    Software is trailing hardware by about 8 years now and that gap is growing at a steady pace. My mam your general user call it uses a core 2 duo with SSD in the pc its still not been pushed for her 3 basic uses of it. ( SSD was mine but i upgraded)

    Most of my general user relivetives are still on pcs from 5 years + Ago brought from pc world cause it does what they want. Windows 8 or 7 is a big no no for them as they have no intrest in it at all.

    Gamers and Video / photo work the things that might require more hardware represent probably at best 1% of the total population of pcs in the world. ( and id say thats a high estimate )

    Intel will be fine all things considered there share price has not moved since these results where released ( technically speaking its gone up ) which is because there server hardware sales are growing and they control alot of that sector (We are talking 80% + of the big money sector basically 50-60% margins )

    If you think enthusaists are intels main profit makers your in dream world. In the uk there will be less than 10000 people who would even fit that title. ( even if everyone of those people brought a 3770k for £250 intel would be only looking at £2.5million thats a drop in the ocean really) Even if you scale that up to say 100k people its still only £25 mil we are not talking large numbers here. ( id be shocked if 100k 3770ks have been sold in the united kingdom)

    For arguments sake lets say intel drops the 3770k to £150 they would need to sell it to 66000 more people to make the same money as selling it before at £250 thats alot more sales 50% or so. They are not going to get that sort of sales increase just by dropping the prices down. As the Customer base is just not there.

    Each intel Xeon chip sells for around £2200 minimum and there is huge margin on these chips.

    Intel for the record only upgraded its GPU to sell more chips to Apple. ( they pretty much said as much in a press conference) As Apple had threatended to go to AMDs APU if the performance was not brought into line for its Macbook Line.
     
  10. schmidtbag

    schmidtbag New Member

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    Lowering prices is not going to help in the long run - all it will do is motivate people to upgrade a little sooner, an upgrade that will prevent the need for another "long-overdue" upgrade.

    At this point AMD and Intel need to stop focusing on performance - we don't need it anymore. Servers obviously can't get enough of it, but the real focus now is making things cheaper, cooler, and more power efficient. There's a reason why ARM is doing so well lately - a quad core cortex-a9 or a dual core a15 is all the average person needs, and they're power efficient enough to run in phones. Today, we're in a special time where people can afford more than 1 system. Why don't people just build 1 computer for low-power casual use and then another one for serious demand? Maybe even a 3rd computer just for gaming. Many people seem to get into the HTPC idea lately too, which falls under this. I feel that using separate computers for separate needs would end up being more cost effective in the end (in terms of power consumption and wear on parts) and would make hardware companies have a steadier income.

    My overclocked triple core Athlon II is still handling everything I throw at it. I might have a longer wait when I compile, extract, or encode/decode something, but anything live such as gaming never maxes out my CPU. The only reason I'm considering upgrading is because of power efficiency. Unfortunately, there aren't many (if any) AMD CPUs that are faster and more efficient than an Athlon II. AMD is so desperately focusing on outperforming intel that they overlook how ridiculously power demanding their FX series is. The sad thing is their FM2 socket processors are more than good enough for the average user, but people care more about arbitrary numbers, which brings down their reputation.
     
    Last edited: 18 Apr 2013

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