The chips are down… but not as far down as we expected

‘Intel Calls A Bottom For Battered PC Market’, reports the Wall Street Journal. Having issued projections in January along the lines of ‘eek!’, the chip maker didn’t do so badly in Q1 after all, seeing fiftysomething margins eroded to fortysomething but remaining in profit, making nearly a quarter of last year’s net income for the same period. That’s the kind of bottom we’d all like.

Among various boring factors such as slashing costs, Intel’s lack of catastrophe was partly down to strong orders for low-end laptop chips. Nobody believes that selling penny-ha’penny netbooks can sustain the PC industry by replacing margin with volume, yet that’s almost exactly what seems to have happened on Intel’s balance sheet. Not sure what we should make of this, except a reminder that whatever gets technology into more people’s hands generally turns out to win, even if it seems like margin armageddon, and shirts bet on maintaining the cosy status quo are generally lost.

In a bizarre Apple-Keynote-Effect-like effect, Intel stock actually dipped in response to the better-than-expected results, but that was because Intel declined to give a clue which way the next quarter was going. Obviously, at the end of an announcement that they’d under-promised the current quarter, some guesses from the same source about the next quarter would have given everyone that crucial element of certainty. D’oh.

Like Intel, all sorts of companies in all sorts of industries – [cough] publishing – have called the end of the world as soon as the first horseman of recession stuck its nose over the horizon, and I fully expect to see a lot more heads peering back over parapets in the coming months and noticing that civilisation is still there.

Meanwhile in the WSJ, Steve Jobs is said to be working on the rumoured Apple netbook-megatouch-thingy. This is a non-story: if there is a netbook-megatouch-thingy, Steve will have his fingers all over it, and if there isn’t, we’re all idiots. I’m reluctant to add to the speculation on the nature of the putative beast. It’s either a posh netbook that does too much and is too expensive, or a big iPod that doesn’t do enough and is probably too expensive.

The former would cannibalise the low end of the MacBook range, except that a range starting at £719 doesn’t have a low end. Coincidence? Hmm. The latter would cannibalise nothing, because nobody’s ever found a market there, and anything looking for one now would look like it was failing to be an eBook. It’s not often recently that Apple has got itself into a lose-lose situation, but…

Me? I want something at the price of the iPod candidate with the keyboard of the netbook candidate. But Apple never releases the machine I want. Ho hum.

Oh, the eMate picture? That’s just to scare you.

Tagged as: Apple, Business, Computing, Design, Intel, iPhone, iPod, Mac