kumar, I suppose I'll have to respectfully disagree with you agreeing to disagree. I definitely don't know half as much about GG theory as many of the board regulars, but I think it's obvious that Intel's status as a gorilla or king is far from obvious. On one hand, they can push a memory standard such as RDRAM in the face of hostile opposition on the part of both its chief rival and nearly every major DRAM manufacturer in existence. That demonstrates some gorilla power. On the other hand, for all intents and purposes, they have to compete with AMD in the CPU market primarily on performance and marketing grounds, which makes Intel seem more like a king.
So which one is it? Even if I was analyzing Intel as a potential investment, I wouldn't bother trying. I'd rather just list some pros and cons to Intel as an investment, maybe something like this:
Pros
1. Astounding sales and marketing clout.
2. Far greater R&D resources than competitors
3. Williamette could be optimized for RDRAM, leading to potential performance benefit
4. Leading embedded flash memory manufacturer, huge potential in PDAs/cell phones
5. Unrivaled economies of scale
6. Large vlaue chain created by numerous investments.
Cons
1. AMD's got a superior high-end processor for now.
2. AMD recently got a flash memory deal with Nokia, previously an all-Intel shop, with Nokia taking a few cheap shots at Intel in the press release.
3. Getting crushed by Broadcom in ethernet chip market.
4. Getting crushed by TI/Qualcomm in cell phone chip market.
5. RDRAM has mixed results so far, maybe the Williammette won't lead offer major performance benefits simply because of the fact that it was designed for it.
6. PC market growth ain't what it used to be. Significant questioning on the part of many users regarding whether people need faster processors.
This was just a cursory run-down by me. There's a lot that I'm sure that some of you could fill me in on. The point is that it's best not to get into Gorilla/King semantics when discussing companies like Intel. IMO, it's just smarter to analyze the company's fundamentals without using a specialized approach formulated by a third party.
Eric |
