<My analysis tells me that pc demand is decreasing>
Wow! What a brilliant and original analysis. And here I thought from pundits and people like Michael Burke that demand has been decreasing for years <gggg>. Isn't demand for PC's always slowing or MAYBE slwoing??? That's what I hear every year. Maybe someone should dell DELL, or GATE, or CPQ.
Fact: PC demand continues to grow at 15-20% annualy.
Fact: Non-US demand (which is a much larger opportunity that US) is growing at a much higher rate. Once a small base, the non-US base will dwarf the US opportunity in a few years.
Fact: PC prices have always decreased even as demand has historically increased. This is what a competitive environment does and this is nothing new. Your little econ 101 lesson doesn't mention the fact that component cost decreases have allowed the price decreases to continue with relatively stable margins. In fact last year's margins were historically high. Sure there will be some pressure on margins, but companies like DELL and GATE built empires on much lower margins that today's margins. I have follwed this industry daily for 10 years and have seen box prices drop every couple months during that entire period. Sometimes it's a case of getting more PC for the same money, but the bottom line is that PC power is getting cheaper all the time.
Fact: <Pentium sales are slowing>....and so are 486's and 386's. No brainer here. BTW, I hear demand for push mowers is also down this year <ggg>.
Fact: Intel is showing tremendous growth year to year.
Fact: <why would someone want something else until the speed is 3x that of what they already have???> Pentium II 266 is 3x faster then what many people currently have. 300's will be more affordable soon and 400's are coming in 1998. Intel's furutre product pipeline is bursting.
Fact: The global economy and society are becoming more and more technology oriented daily. In many parts of the world the technology revolution hasn't even started. In the US the technology revolution is in its infancy. Global demand for tehcnology will continue to grow for the forseeable future and change the way we communicate, spend our leisure time, conduct commerce, manufacture, practice medicine etc. etc.
Opinon: INTC is still on track to reach 200 by year's end.
Wish: I really wish that Intel bears could somehow, someway come up with something original. Anything. Fact is, that all the negatives I hear are the exact same ones that I have heard for the past 5 years. I guess some people just don't understand what is going on in the world around them. It's much bigger than Intel, but Intel is a huge part of it.
Denial: I think the real denial are the bears who don't want to admitt that the demand for technology is no longer cyclical as it once was. Sure there are situations like commoditiy DRAM were supply has outpaced demand recently. But this is the exception not the rule. PC's use to be a luxury item. Now they are an integral key ingredient in keeping our societies/economies functioning.
<My advice, the fund managers want this tech rally, and soon they'll want it to disappear>
Sure there will be ups and downs, but I am focused on the bigger picture. Fact: long term, the fund managers have no influence. Long term stock prices correlate almost perfectly to long terms earnings results. If you believe like I do that the technology revolution is only beginning, then it is easy to see that over the long run technology stocks will outperform almost all other alternative investments (note: health care sector will also continue to boom during my lifetime). Never forget, fund managers, analysts, and WS have no effect on the earnings of companies. They can manipulate prices short term but that's about it. All they are good for IMO is creating great entry points for those with vision and understanding.
FF |
