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Technology Stocks : Intel Corporation (INTC)
INTC 41.14-3.4%3:59 PM EST
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To: Raymond Thomas who started this subject9/22/2000 1:43:40 AM
From: Bob Askins  Read Replies (1) of 186894
 
Cpus like it or not has become a commodity much like DRAMS in the 80's. Up until 1999 Intel controlled pricing and the rate of technological advancement. Competition has ended this by forcing Intel to adopt a technology curve that it was uncomfortable with. Competition has made it much more difficult to maintain steady and continuous earnings growth that Wall Street likes to see. Cisco still has it - Intel just lost it.

The commoditization of cpus will make it much tougher for Intel's marketing to endow a premium on their products. In Asia and Europe where Intel's marketing is not as well entrenched, AMD's processors have made the most significant inroads in the public's mind.

The commoditization of cpus also renders increased R&D expenditures somewhat ineffectual. Some have argued that Intel could use its enormous war chest to out spend AMD in R&D. Here is the catch. Hardware and application (software) advancement are necessarily lock-stepped. Having much faster cpus without power-hungry software reduces its marginal utility to the general consumer. Translation - who cares that they run MS word on a 700mhz or 1.4 gighz machine. The Bottleneck is elsewhere (e.g. disk drive, human interface). Intel's perpetual postponement of the Itanium validates the notion that hardware and software are bound by the hips.
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