Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):
Intel Overhauls Its PC Chip Line, Pressuring AMD
Summary: Intel Corp. introduced 10 new chip models in its Core 2 Duo family. CEO Paul Otellini called the Core 2 Duo chip "the best microprocessor we've ever built". In test run by trade publications, Intel's new chips beat AMD's on most performance tests. The $999 high-end version for desktop gaming PCs is available now, and other desktop versions, ranging in price from $183 to $530, will be available late August. Notebook versions will be shipped to systems manufacturers in September. VP Sean Maloney said Intel is planning a major increase in advertising to promote the new chips. Intel's price-cuts of the chips replaced by Core 2 Duo are leading to market share gains against AMD. An analyst with Current Analysis estimates that Intel regained 13 percentage points of market share in the laptop market in the three months to end-June.
Comment on related stocks/ETFs: This news is already priced-in to the stocks of Intel (NASDAQ:INTC) and AMD (NASDAQ:AMD), particularly because of the detailed discussion of these issues on the recent conference calls from Intel (see transcript) and AMD (see transcript). The added information in the WSJ article is that Intel plans to increase its advertising budget significantly, implying that increased marketing may help PC sales and the stocks of Dell (NASDAQ:DELL), HP (NYSE:HPQ), Gateway (GTW) and the other stocks in the PC "foodchain". Remember, though, that Intel always invests in marketing major new product releases, and the delay in the release of Windows Vista until early 2007 may reduce the impact of an advertising push.