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Ashraf Eassa

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  • How Intel Earns Real Profit From Mobile [View article]

    You're welcome!

    Aug 27 02:58 PM | 1 Like Like |Link to Comment
  • How Intel Earns Real Profit From Mobile [View article]

    I'm not arguing with you that things get significantly better in 2015 for mobile -- they almost certainly will. Contra-revenue (~$1 billion/yr) goes away, volumes ramp, and even margin per unit improves.

    And, no, I'm not "mixing up comments" from different fiscal years. This is straight from the most recent earnings call:

    "That said we acknowledge that’s a big loss and our goal and our plans would suggest that we’ll have a significant improvement in this segment next year. It won’t be profitable but we should be able to improve it nicely next year and stay on a trend. That’s what we’re driving the business to."

    Finally, if you listen to a Q&A from Intel's most recent analyst day (if you would like, I'd be happy to dig up the exact session and shoot you a link to the webcast), you would know that Intel allocates depreciation on a per wafer basis, not on a per segment basis. This fundamentally runs counter to your assertion here that Intel is splitting depreciation and amortization evenly across the reportable segments.

    Aug 27 02:36 PM | 4 Likes Like |Link to Comment
  • How Intel Earns Real Profit From Mobile [View article]

    Even Intel itself expects to lose money on mobile during 2015, with the CFO noting on a recent earnings call that he expected this to be the case.

    I further urge you to do some of the math around Intel's mobile efforts; the current operating expense run rate is somewhere in the neighborhood of $3 billion, which means that sales would need to be somewhere north of $6 billion just to get to breakeven, let alone a profit.

    I don't see that happening in 2015, as it would imply significantly more market share on Intel's part in both tablets and smartphones than I would think is reasonable to expect next year.

    2016, however, could be a different story depending on how much of the smartphone market it can capture via baseband and apps processors.

    Also, Cherry Trail will not include an integrated cellular baseband. Intel has very clearly indicated that its first 14-nanometer integrated apps processor/baseband would be an iteration of its SoFIA product expected in late 2015/early 2016.

    One more point:

    "In fiscal year 2013, Intel had $6.8 billion in depreciation and amortization-related expenses. Assuming the company spreads those costs evenly across segments, it's easier to explain where the $2 billion in losses from mobile comes from. Hardly any revenue. But overhead from other segments applied to mobile (other Intel architecture operating segment), paired with on-going R&D expense, plus promotional activity with OEMs. So, I sort of hope that makes sense."

    Depreciation and amortization impacts gross margin, and since Intel's mobile group lost ~$1.1 billion last quarter on sales of $51 million, I doubt that Intel is allocating depreciation & amortization in any meaningful way to the mobile group.

    Intel's mobile losses are a result of near-zero revenue and very high R&D and SG&A.

    Aug 27 02:17 PM | 3 Likes Like |Link to Comment
  • Intel: The Last Man Standing - Already? [View article]
    The Oracle M7 was mistakenly reported by one site as being a 16FF device. It is not. The HotChips presentation clearly indicated that it is a 20nm device.

    Aug 27 11:11 AM | 2 Likes Like |Link to Comment
  • Amazon buying Twitch for $970M in cash [View news story]
    I don't know why AMZN didn't use stock to do this, but this could be an interesting acquisition.
    Aug 25 10:18 PM | Likes Like |Link to Comment
  • Alacer Gold Is A Case For The Bears [View article]
    Excellent presentation, Itinerant. Thank you.
    Aug 25 08:21 PM | Likes Like |Link to Comment
  • African Gold Group: When Mali Cools Down, This Could Be A Big Winner [View article]
    The Critical Investor

    Lots to chew on here, learned a lot. Thanks for writing.

    Aug 24 06:19 PM | Likes Like |Link to Comment
  • GLD: Market Teetering On A Breakdown [View article]

    Nice article.

    Aug 24 10:32 AM | 5 Likes Like |Link to Comment
  • Alacer Gold Still Looks Underrated Amidst Operating Risks [View article]

    Very nice article. I appreciate that you outline both the challenges and the opportunities, and particularly appreciate that you explicitly lay out the assumptions here and how changes to those assumptions impact your fair value for the stock.

    I also would like to say that I am repeatedly impressed with the breadth, depth, and quality of your work. Great stuff!

    Aug 23 09:54 PM | Likes Like |Link to Comment
  • Intel Is Finally At Qualcomm's Doorstep [View article]
    "So you're saying that Broxton won't be packaged with the Core M? That's wrong."

    Broxton is a completely different SoC designed for a completely different market aimed at a completely different cost structure from Core M.

    Intel develops two processor core architectures -- "big core" (Broadwell is the code-name of the first 14nm big core) and "small core" (i.e. Airmont is the first small core with Goldmont following shortly thereafter).

    Broxton is a chip targeted at performance smartphones and tablets, and will be based on the "Goldmont" core from the Atom line and generally be a completely different chip from Core M or anything related to it.

    Core M is unsuitable for a smartphone as it lacks many critical IP blocks and requires an unsuitable platform bill of materials for a phone. To be clear, Core M is pushing its limits in a 10-inch tablet. It is very unlikely that you will find it in "small" tablets, let alone smartphones.

    Aug 21 03:56 PM | 1 Like Like |Link to Comment
  • Intel Is Finally At Qualcomm's Doorstep [View article]
    805 is in the Galaxy S5 Broadband LTE-A edition.
    Aug 21 02:08 PM | Likes Like |Link to Comment
  • Intel Is Finally At Qualcomm's Doorstep [View article]

    I would like to add that Intel's utilization must be pretty high for it to be able to guide to 66%+ gross margin as it did for the current quarter.
    Aug 21 08:44 AM | 3 Likes Like |Link to Comment
  • Intel Is Finally At Qualcomm's Doorstep [View article]
    Hi Alex,

    "Broxton will use the CPU/GPU design from Broadwell M, from what I understand."

    No. Broxton will be using Intel's Goldmont low power CPU architecture and a low-power variant of its Gen. 9 GPU (a generation ahead of Broadwell M). Further, Broxton will have specific IP that is smartphone/tablet related (such as an image signal processor) that Broadwell M does not have.

    XMM 7260 will not be integrated into Broxton; in fact, Broxton will not have an integrated modem at all according to this roadmap:

    It will be paired with a discrete XMM 7360 modem in cellular-capable devices.

    Aug 20 08:03 PM | 4 Likes Like |Link to Comment
  • Apple tops $100 following bullish Morgan Stanley note [View news story]
    Congratulations to the longs here, though I agree with Paulo -- 60 million seems unrealistic.
    Aug 19 01:32 PM | 7 Likes Like |Link to Comment
  • Lenovo Doing Fine On Its Own [View article]
    Thanks for the write-up, Stephen. Top notch stuff.
    Aug 16 04:15 AM | 1 Like Like |Link to Comment