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Technology Stocks : Intel Corporation (INTC)

INTC 48.80

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Feb 2 3:59 PM EST

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To: derek cao who wrote (37013)	10/21/1997 12:04:00 AM
From: Paul Engel	Read Replies (2) of 186894

Derek - Re: "...does it make sense for intel to force them completely out of CPU market?" No, for two reasons. First, Intel thrives when it has a unique product that is technologically superior to its competitors. Intel has that in the Pentium II and will get the costs down when the 0.25 micron Deschutes is introduced. Intel just needs to keep AMD & Cyrix at bay (i.e., under pressure from Intel price cuts on Pentium MMX) for one or two more quarters. Until then, Intel still needs to keep "reasonable" pricing on their Pentium MMX products so as to maintain "reasonable" profit margins. Otherwise, the wheels may fall off their revenue "chassis". Second - Once the transition to Pentium II/Deschutes is at 50% of CPU shipments, Intel can lower the Pentium II prices at will to make them overwhelmingly attractive to buyers and margins should still be ample assuming that the 0.25 micron Pentium II/Deschutes devices are the majority of products produced - the smaller die size will keep overall die costs to a minimum. At that point, Cyrix and AMD can battle for the low ground, just as Intel let them do with 486-class devices as Intel ramped up their sole-sourced Pentium in 1993/1994/1995. Re: " I am really impressed by MSFT's position against the Justice Department." I am impressed by Janet Reno. She has taken time from her busy schedule investigating corruption in the White House so that she can help out Netscape and some other Democratic Campaign contributors by bringing action against MicroSoft - the most successful software company in the U.S. and the world. Clearly, corporate successes such as MicroSOft are not in the best interest of America. We neeed higher balance of trade deficits - which could be good for future foreign contributions to the Democratic (and Republican) parties. Politics - yuk! Paul

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