I'm starting to wonder just how much of a price war there is going to be between AMD and Intel, given that both chip makers are experiencing a shrinking bottom-line.
Intel has reported a 56% slump in quarterly profits, down to $885 million from $2 billion for the same quarter last year. To top this off, analysts are worried that stock levels at Intel have been running too high and that Intel will have to sell off products at a cut price to clear the levels.
It's tough to see how this is going to play out between Intel and AMD. Intel is undoubtedly the stronger company, it has a substantial amount of cash behind it (in fact, if you subtract Intel's total debt from their cash and short-term investments, they still have more cash and cash-like assets on the balance sheet than AMD took in as total revenue for the last year). Also, Intel's profit margins are better than AMD's (20% compared to 6%) but I still wonder if we are going to see the massive price war that some were expecting, because it takes two to make a good price war and I don't see either company wanting to spook their investors too much.