Mani-- You droids are so silly! There are 6 billion people on this planet. Only a few hundred million of them have a computer. That means there are still > 5 billion computers to be sold to give every man, woman, and child a computer. Given the rapid advent of software, I think it is safe to assume that every one of these people will have to buy two computers over the next ten years. Margins will, of course, have to go down a little bit to supply so many computers to nations inhabited by people with an average per capita income of 1/100 our own, but let's be conservative, and assume Intel's asp drops to $100 per cpu. Guess what? That's a profit of $60 per cpu! That means 10 billion computers * $60 per cpu = $600B over the next ten years. That's $60 billion, BILLION, a year in profits. Furthermore, every one of these computers will have Internet access. So, let's figure that, due to Intel's presence in the high-margin web-hosting business, this will lead to content providers paying us $30 per year for each of the 6B people on the planet. This business doesn't have quite the margins of the cpu business, so, since we're being conservative, let's assume a 30% margin on this lucrative service business. That equates to an additional $60B per year in earnings.
Let's not forget about Intel's masterful expansion plans. These businesses are so exciting and growing at such a rapid clip that I can't possibly hope to provide any explanation for how or when they will become profitable. Let's just be conservative and assume these guys contribute $10B per year in profits in 2010. We're now up to $130 billion-- BILLION-- per year in PROFITS. Finally, let's assume the Internet continues to be sexy and Intel's superior mind share allows $30B per year in investment income.
Applying a conservative price/earnings ratio of 103, that means Intel should be worth $160B * 103 = ~$16 trillion in 2010. Given this, and my genius for investing in Intel, I will be rich in 2010. And that's great, because I really deserve it for my superior understanding of Intel's visionary strategies.
-A very serious Eric |
