Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 40.34

-2.6%

3:59 PM EST

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To: Doug M. who wrote (120689)	12/5/2000 3:06:17 PM
From: Hightechhooper	of 186894

Doug, First of all it is great to see someone interested in issues directly related to INTC rather than the damn perpetual election!! Democrats and Republicans will NEVER agree on the best method for resolving the issue so I don't know why they continue to say the same things over and over and over again...but I digress. My take on the P4 conversion starts with the fact that INTC's current margins are an average of all its products. This means that some products (ex. chipsets, flash) are lower than this average and others (ex. xeon, notebook, specialized comm products) are higher. This diversified product portfolio gives INTC the opportunity to accept lower margins on .18 P4's without sacrificing overall average margins for the company. This is because most of the company growth is coming from products with margins greater than the current average. In addition, I think INTC's pricing scheme has certain revenue per wafer targets so INTC will price its products based on the speed distribution achieved. Finally, INTC has dealt with the "lower margins due to conversion to new architecture" arguement before and the analysts were wrong and Andy B. was right. INTC management has a very good handle on their cost structure and they are the ones that understand the pricing/cost issues better than anyone. They have not given any indication that margins will be materially impacted by an accelerated conversion and I believe them. When the ANALyst worries over this issue are debunked, it will be yet another reason for the stock to rally because right now lower margins are priced into the stock IMO. What do you think?

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