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Technology Stocks : Intel Corporation (INTC)
INTC 45.07-17.0%Jan 23 9:30 AM EST

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To: Humblefrank who wrote (23952)6/5/1997 1:34:00 PM
From: mxyztplk   of 186894
 
FPalardy,

A computer which costs $2-3,000 is apparently affordable to the tens of millions who buy each year. In real terms, this figure has been coming down steadily as volumes have increased and costs have been reduced. In this sense, it is no different than any other mass market electronic product. Similarly, there is a huge range of features/prices. Why do you expect that to disappear?

Remember that, during the same period that computer prices have continued to drop steadily in real terms, Intel's profits have continued to soar in real terms.

If Intel and/or other companies can make profits commensurate with investments on high volumes of sub-$500 computers, they will do so - the market dictates. If, by doing so, they position themselves to make similar profits from more feature-rich machines, all as is done now, why would you expect that not to work?

Intel has stated that they are not attempting to maximize their profit MARGINS, but rather their PROFITS.

Intel has been steadily expanding the portion of the PC pie that it controls and can derive profits from (either directly or indirectly). During the last few years, it was chipsets and the motherboard. This year and next, it is going to be visualization engines, ethernet chips/routers and cache ram. Meanwhile, it is eating into the (high-margin) server and workstation market, using variants of the same technology.

I'm sure you can come up with as many doomsday scenarios as time permits, but most people consider Intel to be in an even stronger position today than ever before, and your doomsday scenarios could have been made at any time in the past. So, aside from an academic catalog of unlikely possibilities, what is its import?

Best regards,

Arno
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