back to article Intel and the Nehalem bump

That nice little bump in server chip sales that Intel just posted in the third quarter? What happens if that's Chipzilla burning off a lot of pent-up demand for decently performing Xeon processors? Yesterday, Intel said revenues had dropped off by 8.1 per cent in Q3, to $9.39bn, and net earnings fell by 7.8 per cent, to $1. …

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  1. Anonymous Coward
    Gates Halo

    "Xeon and Itanium chips are where the profits are"

    Xeon is where the profit is, a nice compromise between volume, R+D spend (AMD did all the chip groundwork for them, Compaq/HP the systems-level stuff), and decent margin.

    Itanium is where the bottomless money-pit is. No volume, huge unshared R+D spend on chips, and margin that only looks good in HP's imagination. Itanium may or may not be even more invisible in the market than SPARC or PowerPC, but sooner or later its drain on Intel's finances will become visible on Intel's bottom line (why invest tens of millions in Itanium when there's a bigger RoI if it goes to Xeon), and so inevitably the Itanium price will go up. HP will have to pick up the price increase, and long-time observers already know where that leads...

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