Maui,
First, a couple of things about your numbers. Intel's guidance, I believe, is 50% growth this year and next year for non-IAG. Also, if you knock the share down to 70% first year, you are lowering the overall growth at the end of 4 years. The more important part is that Intel guidance for overall gross margins for CY is 63%, and that's with losses from the 4 groups. If they continue to lose money, your projections are a nightmare from an investment perspective.
Don't get me wrong, I AGREE that Intel should be investing and expanding their business opportunities, and leveraging the Intel brand. But the microprocessor business is a cash cow. If they were to drop to 70% market share next year, do you realize what that would do to your stock price? They would higher a percentage of fixed costs, flat sales while they are spending $Billions to expand capacity, lower GM's, and lower EPS. Say goodbye to the 50+ PE multiple.
IAG is what allows Intel to expand, both from the profits and the reputation. If you value your investment then you don't want them to get the cart ahead of the horse.
John |
