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More Advanced, Less United
AMD launches a new chipset, and a new front in the war against Intel. United is reportedly pulling some planes and shuttering Ted. And smaller, cheaper houses might just save the housing market.
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EWS AT A GLANCE

AMD fires next salvo in chip war

Advanced Micro Devices, the world’s No. 2 computer chip maker, is launching a new laptop chip today, as it tries to recover lost ground against industry leader Intel. The new Puma chipset is the first that can switch between a low-energy, regular-performance setting and a higher-power, high-performance mode. (Fortune in CNNMoney.com) IDC predicts that laptop sales will top desktop PC sales for the first time this year, and Puma is AMD’s largest foray into the notebook market. More than 100 laptops have been designed for Puma. “Everybody wants a serious competitor to Intel, you can’t ignore that,” said IDC analyst Bob O’Donnell, but “it is a good platform and I think the design wins are a testament to that fact.” (Reuters)

United prepares fleet cut

United Airlines, the No. 2 U.S. carrier, is reportedly taking 70 airplanes out of its fleet and closing down its low-fare airline Ted to cope with high fuel prices. United is also expected to announce new salaried and management job cuts. The reductions to United’s 460-plane mainline fleet come on top of 30 cuts already set. (Reuters) Fuel costs and dire forecasts have cut UAL’s market value by 76 percent this year, to $1.07 billion. Ted, launched in 2004, was supposed to compete with budget carriers such as Southwest, but never had the lower fares or operating costs, said Michael Boyd of the consulting firm Boyd Group. “Ted was never anything other than a different paint job,” he said. (Bloomberg)

Lehman could look for cash abroad

Lehman Brothers is looking for an infusion of capital from foreign partners, including at least one in South Korea, The Wall Street Journal reported. (Reuters) Lehman is facing its first-ever quarterly loss. Its shares tumbled 15 percent yesterday, amid rumors that it had to borrow from the Federal Reserve’s discount window, but then rose after the firm denied the rumors, closing down 9.5 percent, near a five-year low. (AP in BusinessWeek.com) Investors in the options and derivative markets are betting Lehman has farther to fall. “Korean banks have ample capital to make investments in the U.S.,’’ noted Ko Seoung Pil at CJ Asset Management Co. in Seoul. (Bloomberg)

The modest American housing recovery

KB Homes, like most homebuilders, spent the housing bubble years building ritzy, expensive homes. Now it is building homes about half the size, and about half the price, becoming one of the first big homebuilders to downsize. KB’s formula may be a template for how housing recovers. Entry-level homebuyers, largely frozen out of the market over the past few years, now account for 30 percent of sales. And amid tightening mortgage standards, 90 percent of first-time homebuyers have their mortgages insured by the Federal Housing Administration, Freddie Mac, or Fannie Mae. “If I had to write a headline for housing, it would be back to basics,” says KB founder Eli Broad. (Fortune in CNNMoney.com)

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