Updated from 9:19 a.m. EST
With inventory growing 10% sequentially since the September quarter and revenue falling 19% during the same period, Intel is clearly feeling the crush of its slumping PC customers. And given the direction the industry and the economy -- the liquidation of Circuit City on Friday jumps to mind -- there's plenty of downward pressure still building.
Businesses aren't buying loads of new gear, and with rising unemployment and falling home prices, consumers aren't nearly as free-spending as they once were. But within the gloomy big picture is a vibrant corner at the low end of the market that is growing. So-called netbooks, the under-$500, stripped-down laptops from Asian upstarts like Acer, MSI and Asus, have caught on with tight-fisted consumers.Not only do these smaller, sleeker devices threaten conventional notebook sales, but they also don't use Intel's most advanced chips or Microsoft's (MSFT) huge Windows Vista operating system. In other words, netbooks represent the long-predicted undoing of what's commonly referred to as the Wintel empire. Maybe symbolically, anyway. The current crop of netbooks, while fine for kids and business travelers, don't pack enough processing speed or graphics power to make video fans and gamers happy. But more robust machines are coming, and that will be a big problem. Suppliers have to go where the orders take them. For chip manufacturers and other component vendors, when orders for cheaper parts come in, they have to shift production away from more lucrative widgets.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV