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Technology Stocks : Intel Corporation (INTC)

INTC 37.51

-0.8%

Dec 15 3:59 PM EST

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To: Paul Engel who wrote (2686)	7/31/1996 2:39:00 AM
From: Nathan L.	of 186894

Hi everyone- I'm looking for some short candidates based on Microsoft's Win NT & Intel's Pentium Pro servers. Wintel dominates around 90% of desktop PC's and i expect similar results in the server market in years to come. It is estimated that by 1998, 75% of servers sold will have Intel Inside. The Pentium Pro motherboard will essentially let anyone enter the mid to high-end server market. A server built around a single four-chip Pentium Pro motherboard is expected to deliver the power of a $1 million server at half the cost. Using multiple boards, computer makers can rival mainframes. Undoubtably some companies will be hurt by this price/performance efficiency created by Microsoft & Intel. I'm looking to find companies whose revenues are largely derived through commanding high prices & margins on their products which now face new, less expensive competition. I was recently e-mailed a chart containing some data that compared the prices of Intel-based and non-Intel based servers. The data is dated as of March, so i'm sure the prices will be somewhat less expensive than listed (especially for the Intel-based products.) I have no idea who sent me this and i hope they don't mind... Intel-based... Compaq Computer: Proliant 4500 using four Pentium chips and Oracle database software. Cost: $619,400 Data General: Intel Pentium Pro Server, with 1.56 gigabytes of memory and 300 GB of storage. Cost: $460,000 Chen Systems: Chen-1000, including eight 166MHz Pentium microprocessors. Cost: $243,000 Non-Intel... IBM: RS/6000 Power Server J30 using IBM's PowerPC chips and IBM's DB2 database. Cost: $1.08 million Hewlett-Packard: Model T500, using HP's PA 8000 166-MHz RISC chips and has 300 GB of storage. Cost: $1 million Digital Equipment: AlphaServer 8400, uses as many as eight of DEC's own 350-MHz Alpha chips. Cost: $1.1 million Comparing the above Chen Systems server to the DEC Alphaserevr and you notice that with Chen's Intel-based server you get half the performance for under one-fourth the price. The trend is obvious. It looks to me like Sun Microsystems & Novell are gonna feel alot of pain and i have considered shorting SUNW. NOVL looks less attractive as a short to me because it already down so much. If anyone can point out other companies worth considering as a short due to this trend it would be greatly appreciated. Thanks in advance.

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