Let put Pablo conspiracy theory in perspective:
If you were Otelini, would you go after a 3.5 billion gain in annual revenues from a company that is more likely to bankrupt itself out of sheer incompetence or try to break in a 50 billion market that is booming? No matter how good it would be to crush AMD, it isn't there that Intel efforts should be. The most lucrative parts are already with them.
But let's say that Intel is determined to crush AMD, is really necessary any additional efforts from Intel? Not really. Intel is committed to bring Haswell and future iterations of the Core architecture to tablets and convertibles, and more important, it wants every ultrabook to be a convertible. They have to have extreme focus on die size, power efficiency and performance, which in turn means lower ASP that will have to be compensated by smaller and more efficient dies in order to reduce COGS, exactly what Intel has been doing since Conroe but an order of magnitude bigger. So that theory that we are going to see increases of 100USD in notebooks prices is simply against their business strategy, as Intel must have a competitive package for tablets and convertibles, in other words, Intel is moving to a business model of smaller ASP, not higher. This is not a strategy to tackle AMD, this is an strategy to tackle ARM. The AMD issue solved itself in the day they launched Bulldozer.
With bulldozer they shifted to a higher ASP strategy. Intel is pretty much happy with prices where they are now, they are still getting 60%+ gross margins each quarter, while AMD went down to 38% (discounting the inventory impairment). Who needs better ASP here? The fact that they are still seen as the one that keeps Intel prices in check is more due to their inability to sell their products at the prices they want than anything else.
So when Pablo comes here stating things like "Intel's modus operandi ad vitam eternam has been to protect their amazing profits and high ASP's while causing pain for AMD in the value segment." it fails to capture, among other things, that Intel is transitioning to smaller ASP products and that AMD tried and failed to transition to high ASP products. All that is left is that Intel wants to destroy poor AMD, as if AMD wouldn't do the same if it could.
intel's cost structure is going up, not down. if you look at capex, it has literally doubled the past 2 years and as a result, depreciation has increased, and depn charge is the base cost of all intel processors. without growth, depreciation has to catch up to capex, or there will be a massive one time charge...Even if by some minor miracle capex returns to $5B annual, Intel would still have to depreciate $32B over a 4 year period, $8B annually, over 300MM processors, that is $26.67 per unit...More likely is capex will be much higher than this, intel will stretch the depreciation period to 5+ years, but the result will be similar.
If you add actual fab operating costs and packaging and overhead its easy to conclude Intel cannot make money selling parts for $50, they can only continue to do so by way of subsidy justified by the perfectly legal meetcomp. So already the balance between the subsidized parts and the subsidizing ones has to tilt in favour of the latter, if profits are to be maintained.
And then there is the grim competitive reality (as opposed to self inflicted wound as above) that ARM based tablets and smartphones are taking share from x86 and now you have a real problem: volume is going down which means based on simple overhead incl. depreciation allocation, costs have to go up. Ad so first things first, its better AMD cry than they do and so a gear shift from meet comp to meet volume (75MM units per quarter) has to be made and IMO, is being made.
Eventually, AMD will probably go out of business ($450MM per quarter + interest + whatever _____you have to take from Global Foundries becomes very very expensive and unsustainable when you're shipping less and less units at lower and lower prices - just try to model 10MM units per quarter at $30 and see how ugly the bottom line quickly gets).
But will x86 annual volume settle down at a 300MM per year equilibrium? If not, then Intel must replace that volume with tablet/smartphone biz which is much lower ASP so while they're doing that, they'll be raising prices on 286, Celeron, Pentium parts they previously had to sell below cost all these years) until there is no such thing as an x86 processor under $100.
Last but not least, what happens when high end corporate PC's that contain almost exclusively $200+ Intel processors become just another device to access corporate data (which I am told, is the IT vision these days)? More pain for Intel and, higher CPU prices for the masses still.
All that being said, I agree with MRMT that Intel is not doing anything unethical or untoward here, its just the market reality - there's been an inflection point with several aftershocks - first ARM, then iphone, then ipad, then Android, then Amazon and Google's business models.
The irony: intel's most lucrative and stable business after Server: high performance computers with DISCRETE video cards.
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