Intel has $55.9B record year, ships 46M tablets

[witeken]

Mobile division literally had negative revenue in this quarter, and overall lost $4.2bn. How the heck are Intel getting away with this kind of market manipulation? It's textbook monopolist tactics, rely on overwhelming dominance in one business sector to fund dumping in another sector and choke the competition.

I sincerely think it's a good thing that mobile gets merged with PCCG, so I won't have to read all those ridiculous deceptions anymore. Intel's simply investing. They're not doing anything illegal. Intel's loss is enormously exaggerated, like people always like to do.

 

[R0H1T]

I sincerely think it's a good thing that mobile gets merged with PCCG, so I won't have to read all those ridiculous deceptions anymore. Intel's simply investing. They're not doing anything illegal. Intel's loss is enormously exaggerated, like people always like to do.

Maybe they should read out the actual numbers & tell us what the quantum of payouts was for the entire year, I don't doubt for a sec that they'll do this because they certainly will never do this ever.

 

[NTMBK]

I sincerely think it's a good thing that mobile gets merged with PCCG, so I won't have to read all those ridiculous deceptions anymore. Intel's simply investing. They're not doing anything illegal. Intel's loss is enormously exaggerated, like people always like to do.

"Enormously exaggerated"? It's written in black and white, right there on Intel's financial report. They had negative revenue. That literally means that they spent more on contra-revenue in the last quarter than they got in sales. That's not R&D. That's Intel literally paying customers to take their SoCs.

 

[witeken]

"Enormously exaggerated"? It's written in black and white, right there on Intel's financial report. They had negative revenue. That literally means that they spent more on contra-revenue in the last quarter than they got in sales. That's not R&D. That's Intel literally paying customers to take their SoCs.

Sure. The contra-revenue was 15$/chip. A lot of the tablets they sold were cheap tablets, so those chips will have been priced accordingly as low-end, which is less than $15 of course. The contra-revenue was about 1B or less, not 4-5B (you can do the math, right: 15$*46M).

 

[NTMBK]

Sure. The contra-revenue was 15$/chip. A lot of the tablets they sold were cheap tablets, so those chips will have been priced accordingly as low-end, which is less than $15 of course. The contra-revenue was about 1B or less, not 4-5B (you can do the math, right: 15$*46M).

Yes, I know that contra-revenue wasn't 4bn, don't worry Modem R&D is expensive. But that still boils down to "Intel paid their customers to take chips off their hands".

 

[R0H1T]

Sure. The contra-revenue was 15$/chip. A lot of the tablets they sold were cheap tablets, so those chips will have been priced accordingly as low-end, which is less than $15 of course. The contra-revenue was about 1B or less, not 4-5B (you can do the math, right: 15$*46M).

You do know that equals $690 million dollars right? So you're under reporting the contra revenue $ given per SoC by ~50% & as mentioned above this doesn't take into account the amount of $ spent on other BOM subsidies

 

[Nothingness]

The contra-revenue was 15$/chip.

Is that an official number? Missed that information :$

 

[Abwx]

Sure. The contra-revenue was 15$/chip. A lot of the tablets they sold were cheap tablets, so those chips will have been priced accordingly as low-end, which is less than $15 of course. The contra-revenue was about 1B or less, not 4-5B (you can do the math, right: 15$*46M).

That s made up numbers of yours, from where do you extract the 1 bn figure.?.

It s 4.1 bn out of wich 3 bn are thrown on subsides, that s 3000/46 = 65$ for each chip shipped, the cost of the chip can be evaluated to 15$, rest is 50$ cash given with each chip.

Also according to digitimes part of these chips are still in inventories while some others have been used in other devices than tablets, surely notebooks.

 

[ShintaiDK]

There is a slide with it somewhere. People forget all the other cost associated, R&D etc. Its like saying AMD loses money on every chip sold.

 

[coercitiv]

Sure. The contra-revenue was 15$/chip.

So they gave more or less 15$ for a chip with an "official" tray price of 17 - 40$?

 

[ShintaiDK]

So they gave more or less 15$ for a chip with an "official" tray price of 17 - 40$?

They gave 15$ reduction per chip. Its supposed to be 5$ with Braswell if I remember correctly due to lower BOM.

 

[AtenRa]

Good thing the goal was 40 million. I love how you made it sound like it was 50 million.

Ohh my bad then, but again, 70M for 2015 without contra revenue seems impossible.

 

[NTMBK]

There is a slide with it somewhere. People forget all the other cost associated, R&D etc. Its like saying AMD loses money on every chip sold.

Intel did lose money on every chip sold. That's literally what negative revenue means.

 

[kpkp]

A $0 Atom + $$$ subsidy to Asus would certainly explain how Asus could go 4GB of RAM, 13 MP camera, fast-charging, 5.5" display and still hit $199 price. It's like Intel is essentially paying for Asus' costs and absorbing them just to say they have an Atom in a smartphone.

Just to be factual, the $199 is for a 2GB version, but your point still stands.

 

[ShintaiDK]

Intel did lose money on every chip sold. That's literally what negative revenue means.

Yes, but its still only 15$ per chip.

http://www.accountingtools.com/questions-and-answers/what-is-contra-revenue.html

 

[positivedoppler]

This math is *horribly* wrong, see my post above.

Its not wrong, Intel bribed with 4 billion dollars for people to take out their trash. zen fone for 200? Lol, looking more like a $200 bribe

 

[positivedoppler]

And a lousy quarter one forecast, i wonder whats going on

 

[Nothingness]

Yes, but its still only 15$ per chip.

Sorry to ask again, but is that an official number?

 

[NTMBK]

Its not wrong, Intel bribed with 4 billion dollars for people to take out their trash. zen fone for 200? Lol, looking more like a $200 bribe

$4bn is the total loss, including costs for things like R&D. The contra-revenue is "only" about $1bn.

 

[positivedoppler]

$4bn is the total loss, including costs for things like R&D. The contra-revenue is "only" about $1bn.

For the year or for a quarter?

 

[sm625]

lol $11 billion in stock buybacks. Check back in about a year to see how well spent that money was.

 

[Abwx]

Yes, but its still only 15$ per chip.

http://www.accountingtools.com/questions-and-answers/what-is-contra-revenue.html

15$ per chip would amount to 690 millions $ losses, we are far from the 4.1bn official losses, obviously you re making up numbers to try to cover, patheticaly given the available numbers, the extent of thoses subsides, the number is 89$/chip including all costs related to this chip, that is RD and manufacturing costs wich should account at most for 35% of this amount, in other words they would sell their chip at 35% of thoses 89$ to be at break even point in this sector if there was no subsides, that point to 31$/chip in a non distorted market.

 

[coercitiv]

Yes, but its still only 15$ per chip.

Help me a bit here: when the Mobile Division sells 40M+ chips and reports only 202$ million in revenue, that equals to less than 5$ revenue per device.

Did they give the chips away for free?!

 

[NTMBK]

Help me a bit here: when the Mobile Division sells 40M+ chips and reports only 202$ million in revenue, that equals to less than 5$ revenue per device.

Did they gave the chips away for free?

40M+ tablets- don't forget about modems and phone chips on top of that.

 

[Vesku]

Intel is obfuscating how their contra-revenue is working in actual dollar terms. They are selling the Bay Trail chip somewhere in the low 10s USD. But along with those sales they are signing agreements with the following: "We're offsetting the BoM." "We're providing design assistance." "We're investing in partnerships." Etc.

Bit pointless to guess at actual $ per chip of the loss when Intel is actively hiding it. Best to just go by what shows up in the market. Based on the lowest priced Bay Trail tablets Intel is subsidizing to the low single digit US dollars, imo. IF it is costing Intel $20 per Bay Trail then ~$15 per is about right. There is also the indirect loss that doesn't show up on their balance sheet, that Bay Trail wafer could have been an actual profit making Haswell wafer.

From an Intel and Intel shareholder perspective though it's definitely worth the cost. "Fake it until you make it." Intel brand starts to get associated with phones, tablets, and soon IoT. Also less likely to make a misstep versus simply continuing internal R&D until they have the perfect product. This way they are getting direct market feedback. That's one of the things the new Intel CEO vocally criticized his company for doing in the past.

There are downsides to switching to a "ship it" design philosophy. Bay Trail graphics are mediocre for mobile with premium devices having such high pixel densities and is likely the main reason they obviously gave Asus a very sweet deal to get in their Zenfone. It will be struggling to push those pixels on that device. But Intel has its main x86 line to keep the "we're the best" marketing going. I don't think they are in any immediate risk of changing public perception of their brand.