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Technology Stocks : Intel Corporation (INTC)
INTC 41.14-3.4%3:59 PM EST
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To: Joe NYC who wrote (133151)4/23/2001 12:58:19 AM
From: dale_laroy   of 186894
 
"The high ASP in the mobile segment that AMD is hoping for will not materialize."

You can say that again. But the important thing is that by kicking Intel's mobile margins in the nuts, AMD can make it more difficult for Intel to take a loss in the desktop market.

Intel is however, a slippery devil. Not only will AMD find it extremely difficult to get a toehold in the server/workstation market, they will find penetration into the corporate market in general very difficult. This is what the P4 price cuts are all about.

Corporate America has rejected P4 as firmly as they have rejected AMD. Intel is taking advantage of this by keeping the margins on P-III relatively high even as they are slashing them on P4. Intel is hoping that corporate America will continue to buy high margin P-III processors even as Intel floods the consumer market with low margin P4 processors.

In Q2, the only real limit on how many P4 processors that Intel can sell into the consumer market is the limited availability of DRDRAM. By Q3, with the availability of DDR SDRAM mobos (unless mobo vendors decide to wait on Northwood to introduce their DDR SDRAM mobos), P4 in the consumer channels will be a real problem for AMD. However, margins on mobile processors should remain healthy in Q3.

The greatest danger this year to Intel is that, if the market picks up after they have switched major capacity over to P4 production, a shortage situation may develop in the corporate market, thus forcing some corporate purchases to AMD by default.
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