In the lead-up to quarterly reports from Intel and Advanced Micro Devices the week of Jan. 14, some industry analysts are turning their focus from profits to quad-core chip sales.
The results, according to analysts, could show how fast the IT industry is adopting to the still relatively new quad-core products from Intel and AMD. The numbers could also sketch a timeline of when these chips will begin appearing in mainstream PCs and possibly notebooks.
Intel, based in Santa Clara, Calif., will detail its fourth quarter results Jan. 15 and Wall Street is expecting another solid report. Thomson Financial is looking for a profit of 40 cents per share on revenue of $10.84 billion, compared to 26 cents per share and revenue of $9.69 billion for the fourth quarter of 2006.
Analysts will also keep tabs on how many quad-core processors Intel shipped to its customers in the quarter. The company first brought quad-core chips to the market in November 2006 and shipped a total of one million between the introduction and the second quarter of 2007.
Then, in the third quarter of 2007, Intel announced that it shipped two million quad-core processors in just a three-month time span. If this shipment trend continues, said John Spooner, an analyst with Technology Business Research, it could show that the company's quad-core chips are beginning to creep into the mainstream.
One area, outside of servers, that is benefiting from the release of quad-core processors is the workstation market. In the past two months, Lenovo, Hewlett-Packard and Dell have all refreshed their workstation lineups with Intel's 45-nanometer, quad-core Penryn processors.
"The one result of all these quad-core shipments is that the workstation market has really been growing," said Spooner. "It's started first on the desktop side, where the arrival of quad-core processors started a refresh cycle. But it's also seeing growth in mobile - a segment that will get quad-cores as well, in time."
If OEMs are adopting quad-core processors for their workstation lineups, Spooner believes that more mainstream adoption of the chips within desktops and notebooks will follow.
AMD reports its results two days later on Jan. 17 and the Sunnyvale, Calif., company's financial outlook is almost a mirror opposite of its much larger rival.
Wall Street analysts are expecting AMD to report a fourth-quarter loss of 36 cents per share on revenue of $1.79 billion, compared to a loss of 4 cents per share with revenue of $1.77 billion on revenue of 1.77 billion a year ago, according to Thomson Financial.
AMD has struggled to bring both its quad-core Opteron model for servers and workstations and its quad-core Phenom for desktops to market during the last three months. Since December, AMD executives have detailed technical problems with its quad-core design and have promised to deliver "hundreds of thousands" of quad-core chips into the market.
Roger Kay, an analyst with Endpoint Technologies Associates, said that many will be looking at exactly how many quad-core processors AMD shipped in the fourth quarter and how many it plans to ship in the first quarter of this year now that the technical problems have been worked out.
The other issue that Kay and others will be watching is the ASP (average sale price) of the processors to determine if AMD is sacrificing profitability to gain market share against Intel.
"They may drop price in order to maintain share, but they are doing that at the expense of profitability and that's going to be tricky for them at this point with the company's financial outlook," Kay said.
However, if AMD does begin shipping more and more Phenom and Opteron chips into the market to augment what Intel has been shipping, it seems clear that full, mainstream quad-core adoption will not be far behind.