Baytrail to canablize the cores and hurt gross margins
Not so fast John;
John Pitzer - Credit Suisse
Good afternoon guys, thanks for letting me ask the question. Brian, although early the initial read we’re getting on Bay Trail with your partners is pretty positive, and I think that’s driving a concern in the investment community with whether or not Bay Trail is going to be so good that it starts to cannibalize Haswell, and so I guess I’d like to get your thoughts on how you can segment the market properly, to what extent do you think you’re a slave to market forces and to what extent do you think you can bring applications that are MIPS attentive into the ecosystem and secure the Core business even as you try to get more aggressive in Bay Trail and Atom?
Stacy J. Smith
If I can just add a couple of data points on that in terms of what we've seen over the last few years. First off is to reinforce what Brian said. There still is a big gap in terms of performance and features between the best in Bay Trail and the Core i3, i5 or i7 segment of our product line. And if you look at the last three years even in a time where the market's been relatively weak, the Core i5, i7 volumes have been very healthy and if anything we've seen a larger mix overall to Core over that time period. So there still is a healthy segmentation in the marketplace where Bay Trail will play – it will start to expand this into markets where we don't play today. And because of the cost structure we think we can do it with more dollars per unit than we would be able to do if we were going after that segment today with Celeron or even with some of the low end of the Pentium roadmap. So it's a powerful product from that perspective, John.
Brian M. Krzanich
At the end of the day, the market will go where the market goes and better to have a product like Bay Trail that we can play no matter where it goes rather than miss that market which if you look over the past was more than it is.
It is the stupidity that from these analysts that amaze me. They really don't understand the PC device market. Look folks, Tablets do not replace PC's they complement them. Stacy Smith answered it well. They control the desktop PC now they are going into new markets. It is an expansion of their market not a replacement. Is that too difficult for these boneheads to get?