Intel CEO Otellini 'incredibly disappointed' by Dell's AMD decision

Santa Clara (CA) - In a memo distributed to company employees this afternoon, Intel CEO Paul Otellini was quoted as expressing disappointment, coupled with guarded optimism, in the wake of Dell’s decision yesterday to include AMD Opteron processors in its future multi-processor servers.

"While this is an incredibly disappointing announcement," writes Otellini, "it is not totally surprising. We exist inside of an extremely competitive industry and we have always had to work hard to win every piece of business."

Addressing what some analysts have been calling a "hole" in Intel’s roadmap, with regard to multi-processor architecture, Otellini continued, "Certainly the MP niche has been a challenging one for us. On one hand, I am very confident in our new Core microarchitecture and our ability to deliver a strong product roadmap and high quality of support for Dell and its customers such that they desire Intel platforms in the desktop, mobile and dual processor server markets. On the other hand, this is a clear wake up call for us to improve our competitiveness in the MP server segment. It says we cannot take anything for granted. We have to continue to earn our success each and every day."

The tone of Otellini’s words echoed those of his call last month for an extensive "self-re-evaluation" on the part of every department of his company. One of the objectives of the reorganization he has ordered is for Intel to cut $1 billion in costs before the end of this year. During his company’s last quarterly conference call, Intel acknowledged lower sales in almost every market segment in which it does business.

Yesterday’s news didn’t help much. Shares of Intel on the NASDAQ dropped 2.8% in value in active trading today, and continued to drop another 1% in after-hours trading, to the lowest levels since April 2003. Meanwhile, shares of AMD traded nicely higher on the NYSE, rising 9.2% in active trading, and another 3% and change after hours. Dell shares also saw a nice gain.

Late today, a Dell spokesperson told TG Daily that his company had no more news to provide regarding specific details of which Dell servers would get Opteron processors, which processors those would be, or their future availability.

"Much will be written about this event," Otellini concluded in his remarks to employees today. "Inside Intel we need to keep a clear focus on delivering the new family of products this year and next that will allow us to win back share in all market segments and at all of our current and future customers."

Related article :
Analysis : One small step for Dell, one giant leap for AMD

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