Intel and Apple: how the mighty have fallen....

[Dr Mordrid]

Today it was announced that Intel has lost over 218 BILLION dollars of it's stock value just in the month of September. Most of this is due to losses related to their quality and production problems.
NotGood.

They aren't alone: Apple Computer has lost over 11 billion of its value.

Dr. Mordrid

[Riddek]

I heard about Apple, Doc. Their stock plummeted approx. 47%. They mentioned something about iMac problems.(sales, I guess?)

Intel was a suprise to me, though.(sort of)
So where is all the market share going? Athlon? Or is the market just saturated?

I think were going to see some serious hardware price drops in the near future.

[Brian Ellis]

I don't believe that stock prices are, in any way, a thermometer of the health of a company. Take the Apple fiasco. What caused it? A forecast that earnings and profits will be lower. Not even a statement that earnings have been lower. We have seen it also with Eastman-Kodak and a number of others over the last couple of weeks. This is a common stratagem to make shareholders less unhappy. At the announcement, prices drop drastically but the volume of trading is usually actually weak because most institutional investors sit tight, knowing what is happening. It is the small guy who panics and sells in a weak market. Then comes the day when the real results are announced. Usually these are 5 or 10% better than the forecast, making everyone really happy, and the price whizzes up again to where it was before or even higher. Everyone makes a killing except for the small guy who panicked.

I would personally never advise anyone to buy into volatile tech stocks unless it is with fun money not exceeding an aggregate of a few percent of a portfolio but, if you have some fun money, maybe it's a good time now to go for Intel (perhaps not for the Little Apple unless you don't mind losing all your investment).

I'd guess AMD have helped to hit Intel rather hard but, unfortunately, the Athlon/Via is not really 100% compatible with Intel/BX technology, as we have seen on this forum and also for other really high-tech apps. I have little doubt that Intel will be coming back as the pro market leader within a few months, once they have sorted out their chipset and other problems. However, I have equally little doubt that the Athlon will remain as #1 for home computers until Intel bring out a new bug-free Celeron-type CPU with chipset at the same speed as Athlon (or higher). What should never be forgotten is that software developers work almost exclusively on Intel platforms (they may have others available for testing purposes).

I'm not so sanguine about hardware prices dropping very much in the near future. They are already pretty well at rock bottom. Just think about how much AMD and Intel are spending on R&D and new equipment (and special buildings to house it) for producing ever-faster and finer chips. They have to sell one helluva killing of a new product just to break even. Believe me, it is not cheap to remain at the cutting edge of semiconductor technology and the investments must be made to pay back within 12 or 18 months before they are already fit for scrapping. Not quite the same as vacuum tubes/valves, which had a typical 20 year commercial lifetime (some specialised hi-fi amps are still using such beam tetrodes designed in the 1940s!).

The real worth of a company is how it is tackling the future, not an ephemeral prediction and how the small investor reacts to it, or even how the market analyst interprets it. These Wall Street whizz-kids would hardly know the difference between a silicon chip and a potato chip if either bit them on the elbow.

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Brian (the terrible)