Mid-year corrections, forecasts, and procrastinations

Posted: 07.16.07

Who wants to sit in front of a computer writing crap like this, or worse yet reading it, when there’s a beautiful blue sky over our beautiful bay that’s filled with beautiful people on their beautiful and expensive boats?

Jon’s boat gets ready for a little cruise on the Bay

As I was sitting on the deck on my boat contemplating the events of the year, to date, I thought about all those struggling engineers in Santa Clara, Austin, Toronto, Taipei, and Portland, pasting little strips of black ribbon on ruby Mylar sheets as they tape-out the next IC masks for this fall’s coming products. There’s the little green Nvidiites working on the 65-nm version of the G80 to be called the G88/9, while the two-tone red-green ATIites desperately try to finish the R700 before the winter snows come back (although they’re less worried these days that the polar bears have moved off the ice caps). In Taipei, of course, they never take a holiday and think anyone who doesn’t work 15 hours a day seven days is a wienie, while the Portlandites who have automated tools are polka dancing in the town square. Of course, the Germans and French have left already for their four-month vacations.

So what have we learned this year so far?

Never turn your back on a competitor. If AMD has made just one mistake it was in not reading Andy Grove’s book Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company. We hear some cruel person has sent a box of them to the top management at AMD.


Never let a competitor get the upper hand. When Intel heard AMD was rumored to be buying ATI, Intel should have dispatched one of its corporate jets, and the president of Intel should have put his check book in front of Dave Orton and said, “Fill in the number.” Hmm, maybe the Intel guys should read Andy’s book.

There’s technology and there’s marketing, and Nvidia does well in both. While we’ve all been flappin’ our lips about the pros and cons of GPC-GPUs, Nvidia productized the concept, came out with four turnkey solutions and the accompanying software, and turned it into a genuine category.

The best design doesn’t always turn into the best product. What looked great on paper and a data sheet turned out to be a so-so product, good value but not the pizzazz we all expected—the R600 coulda been a contender. (And the Airbus A380 coulda been great airplane.)

Even the biggest marketing campaign can’t make a product great. While the world waited for three long years for Vista to come out, Microsoft had to dilute the engineering teams to defend the fortress against viruses and worms so that when it did finally show up, it was underwhelming and still early code.

Keep your customers happy if you want to keep your customers. Who says companies don’t change? Microsoft gets a gold star for putting its money where its mouth is and standing behind the Xbox 360 and its overheating problems. Instead of pretending it didn’t exist, or hoping that the next rev would make it go away, or waiting for a class-action suit, the company took the initiative and protected its customers—now where do you think they’ll go when it comes time to buy a new game console?

Don’t play by the rules. When Nintendo’s underpowered, tiny game console came out only its fan boys who cheer anytime they hear the name Zelda or Mario were excited; the rest of the world declared it too little to compete. This year we’ve seen the controller revolutionalize the game industry attracting new gamers and keeping the loyalists happy. Now Nintendo is the darling of the industry and the other suppliers are trying to copy it.

As for the future, well, this is a lousy time of year to predict it, especially if you use old data to do that. We’re in the doldrums of summer, the worst quarter of the year (although to my constant astonishment the geniuses on Wall street always seem to be surprised by the seasonality of the PC market and declare it dead every year about this time).

In a week we’ll be getting the calendar Q2 results from the suppliers. We’re not expecting to be overwhelmed; we’re just hoping we’re not going to be in tears over the travails some of these guys are suffering.

And in the meantime we’ll think about all the things we want to do, and are going to do, soon. Really. No, I mean it this time, just as soon as the boat gets cleaned and restocked. gray