He offers five reasons for the downgrade:
- A shrinking PC client serviceable market based on the growth of tablets and ultrabooks. He expects Intel to control the ultrabook supply chain.
- A diminished Intel price umbrella as the macro weighs on industry growth and pricing power.
- Intel Haswell - the upcoming line of laptop processors - "raises the bar in low power and graphics."
- Server processor competition from Intel.
- Much improved tablet processors from Intel.
"Our prior AMD view was based on how expected execution improvements could enable it to drive above industry average sales growth and margin expansion," he writes. "We now expect structural industry shifts to limit growth as: 1) Smartphones/ tablets have become preferred devices for content consumption, 2) Intel’s reaction to smartphones/tablets is to imbue PCs with their key attributes: thin/light, long- battery life, easy-to-use and visually stunning. As Intel seeks to drive increased ultrabook penetration, we expect AMD to be the most negatively impacted."
AMD this morning is down 4 cents, at $3.60.
