Update Intel (INTC)

Sales of server chips were up 170% in the second quarter of 2010 from the second quarter of 2009, Intel (INTC) announced last night (July 13) when the company reported earnings.

When I last updated this stock back in April after the company announced first quarter earnings and an increase in gross margins to 63.4%  I wrote “The company had been projecting gross margins of 58% to 64%. The increase in gross margins is the key piece of news in this report. To get margins up to that level the product mix at Intel has had to shift toward a higher proportion of sales from more profitable server chips. Industry watchers have recently forecast a two-year cycle of big increases in server purchases as corporate customers upgrade their equipment. Intel seems to be signaling that it’s going to ride that trend to higher margins for more than just the next quarter.”

Exactly, Intel said in reporting second quarter numbers. Read more

Apple has completely disrupted the technolgy sector: Can anybody else play this game?

It’s war. Full out war. Savage your former allies war. To the victor go the spoils war. To the death war.

It’s Google (GOOG) against Hewlett Packard (HPQ) against Microsoft (MSFT) against Dell (DELL) against Lenovo (LNYGY) against HTC against Amazon.Com (AMZN)—and, of course everybody against Apple (AAPL).

Apple hasn’t left competitors any choice. Its iPod and iPhone and iPad have completely disrupted the Windows/Intel model that once ruled the computer world. The disruption has been so thorough that Apple has replaced the old model with its own. Now it’s compete on Apple’s terms or become irrelevant.

Need some proof? On April 28 Hewlett Packard bought wireless phone pioneer Palm (PALM) for $1.2 billion—a premium of 23% to the share price. For its money Hewlett Packard got a phone maker headed to bankruptcy with a revamped product line that no one was buying—and what is by all accounts a really good operating system, webOS.

For all intents and purposes Hewlett Packard, a long-time partner with Microsoft that had for years built everything from PCs to lap tops to note books on Microsoft’s Windows operating system and that was set to roll out an iPad killer tablet built on Microsoft’s operating system , spent $1.2 billion to buy an operating system.

That’s how much Apple has changed the terms of battle. Read more