Failure by design

Wow… why does Apple never disappoint? I don’t how he does it, but Steve Jobs has turned Apple from a failing computer maker into one of the most innovative and envied companies of the 21st century. The Ipod has turned Apple into a household name, completely reinvented industrial design and Apple into a madly profitable company. Now Macs are cool, OSX is actually pretty good and Apple is gaining PC market share. (more…)

After investing in nearly 10%, 40+ million shares, in the troubled automaker Kirk has finally left GM alone. Many people first thought that Kirk was going to try and take over the board and boss management around. However, shares of GM slumped to $28 almost immediately, which in my opinion is way too low. Kirk’s sale is not a complete surprise. Kirkorian had been pushing for a partnership with Renault and Nissan for the longest time, but it was rejected by the GM board as being too one sided for the foreign companies. Carlos Ghosn was fairly receptive to the idea given Nissan’s demand for domestic manufacturing capacity and GM’s large surplus. However he was not too keen on Rick Wagoners demand for a large investment in GM and/or cash transfer. At these levels I am an investor in GM, I think GM will bounce in the very near future especially with Q4 earnings coming up in January and time to think about this emotional selling that is occurring.

Thiago Avila

AMD’s recent purchase of ATI for $5.4 billion, which is scheduled to be completed in early 2008, will have a huge impact on an industry dominated by a few players. Intel is by far the largest supplier of computer graphics, due integrated graphics included in OEM laptops and desktops as part of their popular chipsets. The discrete graphics portion of the market is roughly held in equal portions by ATI and Nvidia. This balance has historically oscillated around the 50% market which each company taking the lead momentarily in 6 month product cycles. (more…)

Intel has announced that it will cut 10% of its employees. This represents about 10,500 jobs and according to ThinkEquity Analyst Eric Ross, about a $3 Billion annual savings. This is likely a response to Intel’s dismal quarter and it’s need to improve margins. Intel has been attempting to focus on it’s core business following marketshare losses to AMD in the past few years and a huge fall in profitability. It has recently sold off its mobile chip division (Xscale), which has failed countless times to be profitable, to Marvell Technology Group. This will allow it to focus its attention on its main processor market.

Thiago Avila