Intel lost $1bn on mobile in Q3 '14

[Abwx]

Thanks.

Have anything that isn't seven years old?

You re welcome for this at least, other than that the final judgement is dated june 2014 so it s not like it s seven years old news wise.

Since i m questionning the legality of the contra revenues and claims that it doesnt impact AMD can you give us your own analysis, at least we ll be more or less on topic.

 

[positivedoppler]

Hans Mosesmann - Raymond JamesAnd if I can follow-up with one more. Your competitor on the tablet side has a very ambitious and aggressive strategy, and they're in some cases perhaps giving away these chips for free in tablets. Is that impacting perhaps some part of your business, maybe it's the low-end of the consumer PC market.
Lisa Su - President, Director and Chief Executive OfficerYes. Hans, we have discussed this a little bit before. I think it is definitely true that there are some aggressive competitive dynamics, particularly in the low-end. Couple of quarters ago, we made a decision about how we're managing that. We are certainly competing in the low-end, but we are not going after business that's not profitable. And so if you look at the mix of our business, you see our ASPs up in mobile. And the reason for that is we're actually making good progress at the higher end of the product stack, and at the very, very low-end, we are choosing not to go after a bad business.

 

[witeken]

It is completely relevant to the thread, what intel did 7+ years ago did serious damage to AMD that they are still trying to recover from. These contra revenues that are costing a Billion plus a quarter do effectively the exact same thing. Mullins is a better chip than Bay Trail why would OEMs not want to use it.

I don't have a ton of knowledge about financial topics, but my math comes out at less than 1B$. Since Intel knew there were going to sell 40M tablets, that number should be fairly accurate.

 

[mrmt]

It is completely relevant to the thread, what intel did 7+ years ago did serious damage to AMD that they are still trying to recover from. These contra revenues that are costing a Billion plus a quarter do effectively the exact same thing. Mullins is a better chip than Bay Trail why would OEMs not want to use it.

Done is done, live with it.

 

[mrmt]

This part I'm not sure about, but prior to last year AMD has been doing pretty decent scraping by with low end jaguar core sales. The introduction of Haswell Pentiums and improve celerons did hurt AMD, but the sheer mass of Atoms I see being put in low end desktops and PCs now has to be hurting AMD's domain. I don't know if those atoms comes wrapped with a twenty dollar bill, but you probably know that more than me.

Nope. Only SoCs used on phones and tablets come with contra-revenue, because of the higher BoM. Since BT BoM is adequate for the low end PC market, it gets no contra-revenue.

 

[Erenhardt]

Thread title is misleading. They didn't loose it. They gave it away.

BTW: I would love to get intel tablet for free.

 

[mrmt]

I don't have a ton of knowledge about financial topics, but my math comes out at less than 1B$. Since Intel knew there were going to sell 40M tablets, that number should be fairly accurate.

Piedsquared math is wrong. The 1 billion number is the operating result of the mobile group (Revenue - Contra-revenue - COGS - R&D - SG&A), but he is saying that this 1 billion loss is *all* related to contra-revenue.

 

[III-V]

Certainly a very large percentage of the 1 billion dollar loss is with R&D.

 

[AtenRa]

Certainly a very large percentage of the 1 billion dollar loss is with R&D.

I highly doubt it. The large percentage should be COGS and SG&A. Contra Revenue is close to 250M per Quarter if 1B for entire 2014 is true.

 

[Enigmoid]

Everyone should note intel's previous statements.

http://www.intc.com/intel-annual-re...to-consolidated-financial-statements/note-28/

Some of intel's divisions have always been operating at a loss such as 'all other'.
Note also that in 2012 the 'other intel architecture operating segments' lost 1.3B.

At that time 'other intel architecture operating segments' included

Includes platforms designed for embedded applications; mobile phone components such as baseband processors, radio frequency transceivers, and power management chips; platforms designed for the netbook market segment; platforms designed for the tablet market segment; platforms designed for the smartphone market segment; and gateway and set-top box components.

Mobile and communications includes

"tablet and smartphone market segments and mobile phone components such as baseband processors, radio frequency transceivers, WiFi, Bluetooth, GPS and power management chips"

The "embedded" and "gateway and set-top box components" have been moved to the Internet of Things and PC Client group. Both of which are doing extremely well.

So its not just that intel is loosing money, its that the division looks bad because a lot of the profitable pieces have been moved out.

Also note that 'mobile and communications' lost 760M a quarter even before Baytrail was launched.

Difference between now and then is 280M (per quarter). "Mobile and Communications" has never turned a profit since it was created, always a loss. That may be because intel was spending R&D to create BT but intel is still spending R&D in mobile.

 

[Abwx]

Certainly a very large percentage of the 1 billion dollar loss is with R&D.

It s the other way around, at least 80% is used to subside the OEMs.

A very larger percentage of 1 bn is at least 650m, that s 2.6bn on a year basis, enough money to pay the yearly salaries of 26 000 employees, you think that there s as much people devoted to mobile at Intel..??

As said ad nauseam AMD s whole yearly RD is 1.1bn and Intel would need 150% more for Bay trail and a handfull generic mobile dedicated ICs, quite possible if they hired engineers who are in fact butchers with faked enginering grades....

 

[piesquared]

Done is done, live with it.

Um no, done is not done and their is plenty of dissenting opinion on this subject. Intel's actions 7+ years ago and more recently with contra revenue that caused them to lose a Billion in mobile still has an ongoing impact today. Sorry, the internet isn't the main stream media who can influence sheeple with their propaganda without question. With the internet, people can do their own research and understand the real truth. Intel's anti competitive actions are still adversely affecting my choices today, with the anti competitive practices 7+ years ago, and with the recent contra revenue rebates. I could have a superior product than what intel offers. A class action lawsuit should be considered.

 

[kimmel]

Um no, done is not done and their is plenty of dissenting opinion on this subject. Intel's actions 7+ years ago and more recently with contra revenue that caused them to lose a Billion in mobile still has an ongoing impact today. Sorry, the internet isn't the main stream media who can influence sheeple with their propaganda without question. With the internet, people can do their own research and understand the real truth. Intel's anti competitive actions are still adversely affecting my choices today, with the anti competitive practices 7+ years ago, and with the recent contra revenue rebates. I could have a superior product than what intel offers. A class action lawsuit should be considered.

Please start said lawsuit instead of polluting the forums with posts with baseless speculation. I tend to leave the baseless speculation for the mainstream media.

 

[mrmt]

ntel's anti competitive actions are still adversely affecting my choices today, with the anti competitive practices 7+ years ago, and with the recent contra revenue rebates. I could have a superior product than what intel offers. A class action lawsuit should be considered.

Coulda, shoulda.... Go ahead with the lawsuit, we'll be all waiting for the Almighty to do justice to poor AMD. *grabs popcorn*.

 

[Phynaz]

It s the other way around, at least 80% is used to subside the OEMs.

Citation needed.

 

[lefty2]

I keep hearing this thing about the "bill of materials". The contra revenue is needed to make the final BoT for Bay Trail tablet to be same as ARM tablet.
But which components specifically are more expensive and why?
Anyone know?

 

[kimmel]

I keep hearing this thing about the "bill of materials". The contra revenue is needed to make the final BoT for Bay Trail tablet to be same as ARM tablet.
But which components specifically are more expensive and why?
Anyone know?

Requiring the OEM to use PCBs that are more layers. Certain memory technology support. More expensive and complicated PMICs. More strict guidelines about electrical noise which ends up requiring more passives on the boards. Quite a few things.

 

[Abwx]

Citation needed.

A very larger percentage of 1 bn is at least 650m, that s 2.6bn on a year basis, enough money to pay the yearly salaries of 26 000 employees, you think that there s as much people devoted to mobile at Intel..??

As said ad nauseam AMD s whole yearly RD is 1.1bn and Intel would need 150% more for Bay trail and a handfull generic mobile dedicated ICs, quite possible if they hired engineers who are in fact butchers with faked enginering grades....

Either you have the sense of numbers or you re left asking for citations...

 

[Abwx]

Requiring the OEM to use PCBs that are more layers. Certain memory technology support. More expensive and complicated PMICs. More strict guidelines about electrical noise which ends up requiring more passives on the boards. Quite a few things.

Quite a few things that are just standards design rules, a 8 layers PCB of this size is peanuts, we re talking of a $, there s no substancial added cost overall.

 

[lefty2]

Requiring the OEM to use PCBs that are more layers. Certain memory technology support. More expensive and complicated PMICs. More strict guidelines about electrical noise which ends up requiring more passives on the boards. Quite a few things.

Ok. Thanks for the answer.
What memory technology exactly does an Bay Trail tablet use that an ARM tablet does not?

 

[Enigmoid]

Either you have the sense of numbers or you re left asking for citations...

Guess what? That's not what he quoted.

 

[Abwx]

Guess what? That's not what he quoted.

He quoted one sentence, i can as well use ignorance as an argument but for thoses who have the slightest once of analysis capacity it makes no doubt that the RD "argument" is just aknowledgment of clulessness when it comes to workforce costs.

The only way for thoses amounts to be mainly RD dedicated is if engineers and technicians as well as basic workers that are working in their mobile dpts cost 250 000$ per year and per head, that would put the head count at 10 000 people, wich is much exagerated in respect of Intel s total headcount, if such was their employees cost this would suck 25bn/year just for workfrce costs.

 

[Enigmoid]

He quoted one sentence, i can as well use ignorance as an argument but for thoses who have the slightest once of analysis capacity it makes no doubt that the RD "argument" is just aknowledgment of clulessness when it comes to workforce costs.

The only way for thoses amounts to be mainly RD dedicated is if engineers and technicians as well as basic workers that are working in their mobile dpts cost 250 000$ per year and per head, that would put the head count at 10 000 people, wich is much exagerated in respect of Intel s total headcount, if such was their employees cost this would suck 25bn/year just for workfrce costs.

He doesn't care about the rest of the post because it follows off the original claim.

Hint: It has to do with the 80%.

Also hint: R&D is not 100% salaries as you seem to be thinking.

 

[Abwx]

He doesn't care about the rest of the post because it follows off the original claim.

Hint: It has to do with the 80%.

Tell me where the money s going in that case, that s all good to contradict but all i m reading as answers is things like , " no, it s wrong", "this is not possible" and the likes, i told you, ignorance is used as a counter argument..

Also hint: R&D is not 100% salaries as you seem to be thinking.

For sure, but still an anwser like the ones i quoted, since you like hints i d tell you that RD is mainly enginering ressources consuming, your PCs, or rather mainframes, do not think and all computing ressources are shared, thoses who works on BT use the same HPC servers as the crews dedicated to Skylake for instance.

Intel published their RD budget, it s 2.8bn for last quarter and this is for all divisions including the processes RDs expenses, yet we have people saying that BT and a few ICs dedicated RDs are dispatched 1bn/quarter, as much as AMD whole RD for a full year, AMD s engineers are apparently capable of working 48h/day according to the RD costs estimated by "accounting experts" that hang by there.

 

[III-V]

Your "80%" estimate surely does not leave much -- if any -- room for COGS alone, nevermind R&D.