Saturday, October 31, 2020

Q3 Revenues and profits have both dropped, and Intel, which is under attack, is squeezed out of the chip throne?

This year, the chip giant Intel has not had a good life. First, the 7nm chip was postponed again, then it outsourced cutting-edge technology, and recently sold its NAND memory business. All these have aroused the market's worries, how Intel's performance, the latest financial report gives some answers.

After the US stock market on October 22, Intel announced its performance report for the third quarter of fiscal year 2020. According to the financial report, Intel’s revenue for the quarter was US$18.33 billion, down 4% year-on-year, slightly higher than market expectations in July; net profit was US$4.28 billion, down 28.6% year-on-year; core business data center revenue was US$8.422 billion, A year-on-year decrease of 10%.

Affected by the financial report data, Intel's stock price fell 9.37% after the market, the stock price hit US$48.85, and the market value was US$229.237 billion.

Although revenue is higher than expected, it is still difficult to change the fact that its performance growth is weak. However, the core business data center has changed from the high growth rate of the previous quarters, but it has shrunk this quarter, which may become the key reason for the stock sell-off.

(Source: Snowball ) 

Intel failed to deliver a satisfactory answer sheet this quarter. The performance of the last quarter was good, but the stock price fell sharply due to the delay of the 7nm chip. There were also many problems in the performance this quarter. With AMD, Nvidia and other giants taking advantage of the chase, Intel has obviously become more passive. In the fiercely competitive market environment, which of Intel’s current financial statements are worthy of recognition or insufficiency?

The weakening of data center business drags down revenue, and the decline in corporate government spending may be the main reason for the decline

The data center is Intel’s core business in recent years, accounting for approximately 46% of total revenue this quarter. Compared with the ratio of more than half in recent quarters, there has been a significant decline.

Intel increased its data-centric product line last quarter, introduced a new generation of processors, and hardware and software AI-related product portfolios, with the intention of increasing its customer acquisition capabilities. The company has prioritized more resources to its innovative business, but it is currently not getting the same return.

The financial report shows that the data-centric business this quarter was 8.422 billion U.S. dollars, down 10% year-on-year and 16.8% month-on-month. The benefits of cloud office, cloud education and 5G network in the last quarter have had a positive impact on Intel's core business, but the positive effect brought by the market has not been continued this quarter.

among them:

  • The Data Center Group (DCG) contributed US$5.9 billion in revenue, a year-on-year decline of 7%;

  • The Internet of Things Group contributed US$677 million, a year-on-year decrease of 33%;

  • Revenue from the autonomous driving business was US$234 million, a year-on-year increase of 2%;

The decline in the revenue of the Data Center Group (DCG) department is the main reason that drags down the overall data-centricity. Among them, DCG's revenue from corporate and government market segments fell by 47% year-on-year in this quarter, ending the high growth trend of over 30% growth for two consecutive quarters.

According to Intel executives disclosed in the financial report, the economic weakness caused by the epidemic has inhibited the demand for data centers from global companies and governments.

Previously, Dell'Oro Group data center capital expenditure research director stated in the second quarter that the epidemic is expected to severely disrupt the global demand for data center infrastructure equipment this year. At present, the vertical industries that have been hit by the economy, especially the physical retail industry, tourism, hotel industry, and small and medium-sized enterprises, have tightened IT expenditures, and resumed related expenditures after waiting for the business environment to stabilize.

This means that in the short term, companies or government departments will also tighten their funding related to data centers. In such a market environment, it is not difficult to understand Intel's data center business revenue decline this quarter. Starting with Intel, perhaps this also means that AMD and Nvidia’s data center business revenues in the new quarter are also facing a downward risk, and the performance of cloud-related giants such as Microsoft and Amazon may also be affected.

It is worth mentioning that Intel is currently in the process of strategic transformation with the data center as the core, stepping into new areas and launching related products, which has dragged down the short-term performance of overall gross profit margin. Data show that Intel's gross profit margin was 53.1% this quarter, a 5.8 percentage point decline from 58.9% in the same period last year.

Looking back at multiple quarters, it can be found that its gross profit margin has shown a downward trend since the third quarter of 2018, which may reflect from the side that Intel has gradually lost its right to speak on prices in the industry.

AMD's current chips are further improved in energy consumption under the support of TSMC's technology. Intel's advantages are gradually shrinking, and the once high product prices have discouraged many users. The recent price reduction strategy to deal with AMD's impact on the chip business has undoubtedly exacerbated the decline in gross profit margin. If the speed of product development continues to be inferior, it may be difficult to see a rebound in the short term.

This year, Intel's competitors have achieved certain breakthroughs in the data center business. Since AMD returned to the server processor market, although it has not disclosed the specific data of its data center business in detail, its market share continues to expand or reflects the growth trend of the business from the side.

Affected by the decline in Intel's data center business, AMD's stock price rose nearly 3% after the market yesterday, and the market seems to give Intel's competitors higher performance expectations.

Nvidia has been increasing its data center business recently. At the recent GTC conference, the company announced the launch of the Data Processing Unit (DPU) to take over more tasks in the data center and announced plans to develop new chips, aiming to compete for more market share from its main rival Intel CPU.

At present, Intel's competitive landscape is not optimistic. As its emerging business, the data center will still face new competitors. The data center business is developing rapidly, but there are still uncertainties in market demand. This also means that Intel's data center products are not the only choice in the market.

PC business is in a "middle-aged crisis", AMD's "grabbing" hard to raise water

The data center business is Intel's future, and PC, as the company's old business, is still valued by Intel. The PC business is still the company's "cash cow". The financial report shows that the PC business revenue in the third quarter was 9.8 billion US dollars, an increase of 1% year-on-year.

Affected by remote home office, demand for personal mobile PC products has increased, while demand for desktop PC products has been suppressed. At Thursday’s earnings report, Intel’s Chief Financial Officer George Davis said that demand for personal computers has shifted from desktops and high-end commercial PCs to consumer-grade and educational products. Therefore, despite sales growth, the average selling price has fallen, affecting profit .

It is undeniable that PC, as an established business, has gradually lost its momentum for rapid growth, and its growth has gradually stabilized. But Intel is also facing competitive pressure from AMD when occupying a stable market share in the PC market.

In the second quarter, AMD’s revenue from the computing and graphics division was US$1.367 billion, higher than the US$940 million in the same period last year. In fact, AMD has maintained substantial growth in the PC business for several consecutive quarters.

The PC business contributed US$1.44 billion in revenue in the first quarter of this year, a year-on-year growth rate of 73%; in the fourth quarter of last year, it contributed US$1.66 billion, a year-on-year growth rate of nearly 69%. And this year AMD's launch of processors based on the Zen 3 architecture is bound to seize part of Intel's market share.

In addition, at the end of June, Apple officially lost its major customer. In two years, Apple will transfer MAC to custom-designed ARM-based chips, which will undoubtedly inhibit the growth of Intel's PC business.

In general, the data center business, which has attracted much attention from the market, has not delivered a high-growth report card, and the PC business revenue has stabilized and it is difficult to give the imagination of high-growth. In front of Intel, what urgently needs to be solved may be the production problem of new chips, which lags behind industry rivals in terms of manufacturing technology, and its own 10nm and 7nm processes cannot keep up with the rhythm, and will fundamentally lose some of its competitive advantages.

AMD and Nvidia beat up the chip arms race, Intel still has Apple's growth strength?

Under the strong offensive of competitors, Intel has made many moves in the sale of assets and acquisitions, and has shown its anxiety in manufacturing technology.

Intel, which once regarded the memory chip business as one of the six pillars, recently announced that it would sell its flash memory business to SK Hynix.

The poor performance of the flash memory business may be one of the reasons for its sale. Although the market has expressed concerns about Intel’s performance decline in the sale, the US Stock Research Agency believes that the divestiture of non-core businesses will provide Intel with sufficient free cash flow and help it to seek development in core businesses. In the long run Not a bad thing.

Its own business expands to artificial intelligence, edge computing, etc., and these businesses require a lot of capital investment. Making adjustments to the business strategy and selling low-yield businesses can increase Intel's overall earnings.

History always seems to be surprisingly similar. Intel’s plan to sell the only Chinese fab to SK. When AMD was in a business crisis many years ago, it chose to sell its fab in exchange for funds, thus gradually expanding its PC business. Market position. Whether Intel can bring unexpected results this time is also worthy of attention.

Nvidia previously acquired Mellanox for US$6.9 billion to obtain its network technology, and it was reported that it acquired Arm for US$40 billion to obtain its excellent computing capabilities; AMD subsequently said that it is discussing acquisition plans with FPGA chip manufacturer Xilinx, and FPGA is to develop 5G communications. , Data center, an important part of the driverless market. Obviously, the acquisition attempts of these two giants are all aimed at the data center business that Nvidia focuses on.

While competitors have announced acquisition plans, the huge shock in the chip industry has continued. Intel’s sale may be a powerful counterattack to competitors.

Intel has deployed in 5G, autonomous driving and other fields, and is expected to bring greater imagination on the basis of its current performance.

With the transition of the telecommunications industry to 5G, the next round of network transformation may give rise to a $25 billion chip market. Intel currently provides hardware, software and solutions for 5G network infrastructure, and is expected to seize the new opportunities brought by 5G.

Intel’s subsidiary autonomous driving Mobileye has won large orders from Ford, Geely and other automakers this year, and Qualcomm and Nvidia grabbed the market share of autonomous driving. Cooperate with transportation operator WILLER to deploy autonomous driving tests to multiple countries or regions. Although mobileye currently accounts for relatively small revenue, it has huge growth prospects from a trend perspective.

At present, the market as a whole is optimistic about Intel's growth prospects, but it is lower than expected in the first half of the year. At present, a total of 43 analysts have made a rating, which is a comprehensive "hold" rating, which is further downgraded from yesterday's "hold" rating. This may mean that Intel's subsequent performance growth is still facing considerable pressure.

Source of this article: US Stock Research Institute, please indicate the copyright

What have we learned from this round of DeFi ups and downs?


JPMorgan Chase once called Bitcoin a fraud in 2017, which is worse than the Tulip bubble; but now it says that Bitcoin will compete with gold and has huge room for long-term growth. From MLM scam to have the opportunity to shake the important tradition of innovation finance, currency in bits represented by the block chain line of rapid development of industry, but also will have some outlet from time to time.

Recently, the market has temporarily calmed down after the DeFi boom, and new hotspots are still gestating but not flourishing. This article will sort out and reflect on the DeFi wave caused by liquid mining this year, and explore the next possible outlets and investment opportunities.

DeFi is booming, whose cheese is moved?

DeFi is not a new concept. The current DeFi leader MakerDAO was established in 2017. The originator of DeFi, BTS, has existed in 2014, but the DeFi fire is in 2020.

In mid-April, the decentralized lending compound launched the governance token COMP, surpassing Maker in less than two months to become the No. 1 in DeFi market value, officially kicking off the DeFi 2.0 era. In the same period, Uniswap, a decentralized trading platform, has sprung up, hitting centralized exchanges with no listing fees. During the same period,, the biggest dark horse of the year, was born. After 30 days of the 8-year market of Bitcoin, it skyrocketed more than ten thousand times in 43 days. The total amount of DeFi locked up has also increased by about 20 times from the beginning of the year. When it was in its prime, DeFi successfully triggered FOMO among investors in the currency circle, and even attracted the attention of regulators such as the US SEC.

However, since mid-September, major DeFi leading projects have led the decline, with higher points such as COMP, UNI, and YFI all falling by about 70%, and DeFi suddenly burst like a bubble. At the same time, counterfeit coins are rampant, the founders are cashing out, the project lacks code security audits, and smart contracts have backdoors... all kinds of strange phenomena are emerging in an endless stream. DeFi is instantly criticized and short-selling by the currency circle community.

DeFi is booming, but what caused this wave of craze to fade quickly? Whose cheese was moved again and was hit? In fact, there are many reasons, but if you sort out market trends and news, you will find that the most direct counterattack starts with the entry of centralized exchanges.  In order to avoid capital outflows and missing hot spots, CEX first launched the DeFi tokens in mid-to-late August, and then specially opened the DeFi section, and even lowered the listing conditions in the face of the popularity, boosting the DeFi boom to reach its peak, but it also accelerated The DeFi boom has receded.

Since September, many CEXs have entered liquidity mining to conduct DeFi wealth management on behalf of users. This has greatly reduced the barriers to participation and risks for traders, making the previously risky profitable DeFi project gradually return to the normal range of returns, and the original "28th effect" has become "participation."

In addition, with the stagnation of currency prices, liquidity mining has entered a vicious circle: under the "dig-sell-withdraw" model, large households earn tokens by providing liquidity, and then withdraw and sell, which once again creates selling pressure on the currency price . Buyers in the secondary market are locked in one after another, coupled with the continuous exposure of negative news, market confidence has been greatly lost, and the DeFi boom has been declining.

Only bubbles? Face up to the financial innovation behind DeFi

Why didn't Maker and earlier BTS lead the DeFi boom? DeFi is just another financial bubble, does it have no value?

In fact, the rise of this round of DeFi is not accidental, but a financial innovation driven by technology and products. The temporary retreat of the DeFi boom is due to previous excessive speculation, but it does not mean that there is no support.

Let's start with financial innovation. The lending leader Compound has innovatively introduced governance tokens. Both borrowers and lenders can obtain governance tokens by providing lending assets and borrowing assets. The introduction of governance tokens stimulated enthusiasm for market participation. Both the number of asset offerings and the number of asset lending in the Compound application have increased significantly.

In fact, the essence of Compound business is margin trading. The active application of Compound makes digital asset trading more active. Users can borrow digital currencies from Compound applications at low interest rates, and then apply them to digital asset transactions that can obtain higher returns. Data shows that Uniswap, the leading DEX, saw a substantial increase in transaction volume during the same period.

Uniswap [constant product] model is used, so that the user can token exchange directly in the exchange pool, not only to change the previous order book post easy to mold type, but also reduces the market-making threshold, so that each user can become one The market maker of the trading pair and shares the fee income. This is very attractive to borrowers who have successfully financed money in Compound. Uniswap's innovative mechanism has seized some of the users and traffic of traditional centralized exchanges to a certain extent. This is also where Uniswap is more successful than previous DeFi projects. is also financially innovative. As a decentralized financial platform, it covers complex functions such as aggregated liquidity pools, leveraged trading platforms, and automatic market making. It can combine the tokens lent by investors with dYdX, Aave and Compound. Automatically allocate and transfer between to achieve the highest profit.

This series of financial innovations have jointly contributed to the DeFi boom. These innovations have important value. They successfully migrated the original centralized financial facilities to the blockchain. This is the most important significance of this round of DeFi boom for the development of the blockchain.

 The Future of DeFi Driven by Technology and Products

Let's answer the last question again: Why did DeFi's financial innovation get together in 2020?

In fact, it is not enough if there is only financial innovation without corresponding blockchain technology and ecological development. Take the compound we mentioned first as an example, the oracle is indispensable. The oracle provides on-chain prices that can be quoted by smart contracts for various DeFi applications such as decentralized lending. Users of decentralized lending can lend or borrow based on the price of the oracle, so as to prevent the borrowing price from deviating from the market price and causing losses. It can be said that the maturity of common tools such as oracles provides important support for the large-scale emergence of DeFi applications.

The role of the oracle is actually more powerful than imagined. At present, the locked assets in DeFi applications are still mainly on-chain assets. However, in the future there will be more off-chain assets on the chain, and the oracle can realize on-chain and off-chain data. Interaction, which will enable the application scenarios of DeFi to be expanded more widely.

With the gradual completion of the issuance of governance tokens in the DeFi project, decentralized autonomy (DAO) is also an important technical support for the future development of DeFi. DAO is not a new concept. In 2016, The Dao, a DAO organization based on the Ethereum blockchain platform, was born, but due to the vulnerability of the smart contract, huge amounts of funds were transferred by hackers. DAO can realize the establishment of an online version of the company's equity structure, token conversion mechanism, voting, job appointment, financing and accounting on the blockchain. When the DeFi project enters the community governance model, DAO needs to provide more mature and complete governance functions, only in this way can it ensure a more vigorous development of DeFi.

In addition, the interconnection of all things and the interconnection of all chains are not only the theme of the times, but also the bottleneck that the blockchain industry urgently needs to solve. DeFi projects are still mainly concentrated on the Ethereum chain. In the future, the development of cross-chain technology is important and urgent. Cross-chain technology allows more private chains and public chains to interoperate, breaks the island effect, supports more assets on the chain, meets more real transaction needs, and promotes financial prosperity on the chain.

Friday, October 30, 2020

Smart watch new situation

 Smartwatch players can be divided into three factions, however, no matter which faction, they cannot escape the routine.

"It can watch the time, it can not only watch the time." Just looking at this ad slogan, do you know that this is an Apple iWatch ad?

In 2013, the American company Pebble released the world's first smart watch. After a hot period, the market gradually cooled down due to its single function. In 2017, the "sports health function" was introduced into smart watches, coupled with the emergence of independent networking, allowing smart watches to be separated from mobile phones and become truly independent devices.

In 2019, with Google's high-profile announcement of the US$2.1 billion acquisition of Fitbit, the originator of smart bracelets (Fitbit acquired Pebble, the originator of smart watches), and the entry of more new players, smart watches ushered in the second spring.

Who is entering the second spring?

With the difficult changes in smartwatch products, the old players have partially ended, and a lot of new players have replaced them.

In addition to Google’s acquisition of Fitbit, the second ignited hopes for smart watches. The domestic smart hardware representative Xiaomi also launched the first smart watch in November of the same year. The embarrassing thing is that once it was released, it was questioned that "plagiarism" had already entered the game. apple;

In March 2020, OPPO launched the first smart watch "OPPO Watch"; in September, vivo officially released the first smart watch "vivo Watch".

In the first spring, due to factors such as the system's failure to keep up, the single functional application, and the high degree of homogeneity with mobile phones, with the passing of freshness, smartwatches ushered in a low tide in 2016, with annual sales only over the previous days with an increase of 1 percent.

During the low tide, some manufacturers that were the first to be "the first batch of crab eaters", such as Microsoft, Google, Motorola, etc., decided to temporarily or permanently exit the track, "We have not seen the sales performance of smart watches. It is attractive enough to release new smart watches with Android Wear 2.0." Motorola, one of the "crab-eaters", said publicly at that time.

At this point, the first batch of smart watch players finally scattered and stayed.

Until 2017, the emergence of the "sports health + independent networking" combination pulled smart watches from the low tide. This can be seen from the sales volume. In 2017, 2018, and 2019, 29.3 million units, 45 million units, and 62 million units were shipped respectively, achieving a year-on-year increase of 38.8% and 53.6%. Among them, Apple Apple Watch leads a lot of players with absolute advantage.

Three martial arts of smart watches

After the first wave of turmoil, the current smartwatches are ushering in the second wave of excitement. As far as mobile phone manufacturers are concerned, those with names on the shipment statistics list have developed smartwatch product lines.

In terms of the nature of the current manufacturers, smartwatch players can be divided into three factions, namely mobile phone manufacturers, AI startups/Internet companies, and traditional watch manufacturers.

Mobile phone manufacturer

In detail, there are no less than 9 mobile phone manufacturers currently on the smart watch track. Specifically, they include Apple, Samsung, Huawei, Xiaomi, OV, Lenovo, ZTE, and Motorola, which is returning again.

As mobile phone manufacturers, they have a natural advantage in that they can attribute smart watches as part of the mobile phone ecology, and use the linkage between smart watches and smart phones to push the product closer to consumer groups.

Functionally, the design of smart watches by mobile phone manufacturers is based on "sports and health functions". In terms of market segmentation, Apple Watch took the lead and won half of the global market share, followed closely by Huawei and Samsung with names on the statistical list. Other mobile phone manufacturers are classified as others.

AI startup/Internet company

There are 4 representative companies of this sect, namely Jiaming, Xiaotiancai, Huami and Fitbit.

Among them, Garmin's excavation of health and sports functions can be said to be an important contributor to the rise of smart watches.

Another thing worth paying attention to is the little genius. The main highlight of "child care" sets it apart from the other three. It has also successfully captured the huge stock market of children. It once became a smart watch with shipments second only to Apple. Brand.

Due to the lack of the natural advantage of smart phones, although the products of AI startups/Internet companies such as Jiaming, Huami and Fitbit are also directly oriented to consumer groups, the threshold also exists.

Under this premise, if you want to gain sales, you will either be like a small genius, or target a more vertical group, or seek orders from the B-end market. For example, Garmin chose the first one to organically integrate GPS navigation with the health industry, creating dozens of series and dozens of categories of smart wearable products, which have been well received by outdoor sports enthusiasts and professional athletes.

In addition, in the B-side business, around the current smart watch heart rate monitoring and other functions, scenarios such as hospitals will also be a good market choice.

Traditional watch maker

Representatives of this school are Fossil (fossil), Casio, etc.

Compared with the other two sects, this sect does not pay so much attention to sports health in product design. For example, Fossil, it may also be equipped with sports modes, heart rate monitoring, etc., but it is more concerned with trend factors.

The combination of "technology + fashion" also gives more possibilities to the smart watch, a piece of smart hardware. With this combination, perhaps this sect brand cannot squeeze into the forefront of the track, but it has its own place, and there must be no big problem.

Is it due to sports health, and is stuck in sports health?

As mentioned earlier, the rise of this wave of smart watches is due to the "independent networking + sports health function."

Previously, industry observer Hong Shibin divided intelligent life into three major scenarios, namely smart homes, connected cars, and smart wearables. Among them, only smart wearable devices centered around users showed a trend of overall demand growth. The main reason behind this is that people are The importance of own health is getting higher and higher.

This point was also reflected during the epidemic.

According to IDC statistics, in the first half of 2020, even with the impact of the new crown pneumonia epidemic, the total global smartwatch shipments still increased by 20% year-on-year, and the total shipments were close to 42 million units, which is only a difference from the annual shipments in 2019 20 million units. Based on the performance in the first half of the year, considering the release of new Apple Watch products in the second half of the year, as well as the attempts to drop prices, it will be easy to surpass the results of 2019.

As for the future trend of smart watches, Jeff Fieldhack, the marketing director of Counterpoint, a market research organization, also stated in the report that after the epidemic, a "national health awareness survey" has been conducted around the world to make people pay attention to health monitoring, sports and fitness and related issues. The demand for equipment has risen sharply, and it is expected that the future development focus of the smart watch market will still be fitness and health applications.

It can be noted that "sports health" has become a key word that smart watches can't do without, and functions such as blood oxygen function are also becoming the "standard" of smart watches.

For manufacturers, if they want to enter this track, the sports health function may be the stepping stone. At the same time, sports health functions have also become a "yoke" for them in the market competition.

According to Counterpoint statistics, in the first half of 2020, Apple won 51.4% of the smartwatch market share with Apple Watch products, which was only 43.2% last year. In addition, in September of this year, Apple even launched a "big killer"-launched Apple Watch SE to test the mid-range market.

Here we can refer to the iPhone SE case. CIRP has issued a report showing that although the iPhone SE was launched late in the second quarter of 2020, its sales accounted for 19% of all iPhone sales, successfully allowing users with old iPhones The upgrade has absorbed many users from the Android camp. It can be said, iPhone SE made a very big success, together with the iPhone 11, make apple fruit to work the tentacles lowered into the mid-market.

This time, Apple will move to the Apple Watch product line based on the iPhone SE's routine-the price is close to the people and the key features are not lacking. Its purpose is self-evident. Therefore, under the premise that Apple Watch is the dominant player and the homogeneity of sports and health functions is too high, as Apple explores more markets, it is more difficult for other smart watch manufacturers to catch up with Apple.

Another question is also reflected here. Is it possible that the highlight of smart watches can only be the "sports health" function? Is there any other path?

In fact, there are still some. After all, with the acceleration of the 5G era, AIoT is becoming a part of the core strategy of various technology companies. As a smart carrier, smart watches can also have an important strategic position in the layout of "AI+IoT". For example, like smart speakers, it has become one of the entrances to smart life.

In fact, there are already some smart watch products that have the function of "control home", but under the light of sports health function, manufacturers have not made any effort to promote this function. The reason behind this may be that the past smart ecology was not very mature, but AIoT has arrived and it is time to promote it.

It can be expected that when smart watches can have more intelligence and control functions, combined with the addition of sports and health functions, it will be able to open more markets, and the interaction with users will be further enhanced.

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