John, re: "I've said here before, I think Intel will and should get into the PC box business (not today, but sometime well in the
future)."One thing you will note on that earnings list is that all the companies manufacture consumer branded,
finished products (with the exception of Merck maybe). None are *component* manufacturers. It is unique (but I
don't believe sustainable) for a component manufacturer to command the brand equity the Intel enjoys.
It may be unique for a *component* manufacturer to have the brand name recognition, but, to me, that is where the true highest technology has gone. The box makers need only buy the motherboard, chips, cards and a box, integrate and test, and, voila, they've got their product. Not much value added there. OTOH, Intel has to continue to develop ever faster and with more new function CPUs and chipsets. This involves incredible efforts in architecture, design, simulation, fab and test before they can sell one chip. They have been able, with their brand name recognition, to get, what I would call, almost embarassingly high gross margins for the product that results from this development. What margins would they get throwing their hat into the ring with the Compaqs, Dells, Gateways, PBs, etc.? Why dilute 59% or so GM with, what, low 40's? Besides, wouldn't they pi** off all their customers?
The only place I can think of that you are coming from is this scenario: Intel will probably eventually be making ALL the stuff in the PC box. So, they have all the components required to build PCs FIRST (before any box makers). Therefore, why not build the chips AND PCs by the bazillions and grab ALL of the PC market?
Scary,
Tony |
