Rob Black's Tech Stock Report

Includes: AAPL, INTC
by: Rob Black
Intel (NASDAQ:INTC) will cut 10,500 jobs as part of a plan by CEO Paul Otellini to reduce costs by $3 billion annually starting in 2008. Today's announcement includes 1,000 management jobs eliminated in July and the announced sale of two telecommunications units that will shave 2,000 more people from the payroll by the year's end.

Intel will also be spending less money as it expects to achieve a capital expenditure avoidance of $1 billion by better utilizing manufacturing equipment and space. So why the job cuts? The simple answer is profits. Intel, whose income rose 15 percent last year, may report a 45 percent decline in profit in 2006. Wall Street analysts have criticized Intel for being too bloated and having lost its focus on making the chips that power servers, desktop computers and laptops.

The long-anticipated upgrade to Apple (NASDAQ:AAPL) Computer's iPod is likely to be one step closer to reality, after the company sent a typically cryptic invitation to an event next week in San Francisco. Apple emailed invitations to the Sept. 12 event, with the notice proclaiming "It's showtime" and with the Apple logo set against a background of spotlights.

The speculation is that Apple will release an updated iPod nano player with an increase in memory beyond its current 4-gigabyte maximum level. Also, it is well known that Apple has reached agreements with several major film studios to begin selling movies online through the company's iTunes store. Selling movies online is seen by many technology executives to be the holy grail of downloadable entertainment, as it is considered the main conduit by which computer companies can move into the consumer living room and alter the landscape of the home-entertainment market. The real long shot is that Apple will introduce a phone, but even if that does not come this year, expect it soon thereafter.

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