Thats a fair assessment.
The question is how long term.
The stock has been flat before - eg most of 1993-1994 - so this time wouldn't be different.
After that came the Pentium era with no margin competition and 39% yty sales gains - now changing to:
LEHMAN REPORT
"Meanwhile, INTC is on a pricing curve much more aggressive than
anything seen in the past 3 years. It is hard to quantify the impact of these issues, and we still have no real visibility on INTC's near term earnings, but we no longer believe that multiples at INTC near term are going up."
Intels reponse has always been to have a new chip ready. And it appears there's a wait of a few quarters - Deschutes, 100mhz bus etc. - which some folks are waiting for. But then again the near term competition, looks impressive, but doesn't deliver - like the Republican Guard, although a few scuds might get through:
"Even IBM is not able to get adequate quantities of the K6, which speaks to the problem that the yield issues have not been addressed yet," says Southcoast Capital's Ashok Kumar. Sources say AMD has lost its K6 design win with Hewlett Packard. While some analysts believe AMD's problems are long-term and severe, others are still optimistic. "
Then of course there's the Merced which should blow everything away - whats a K7 anyway? But this raises the question of whether folks are ready to pay higher margin for all this power, or go cheap and wait a few years - after all its going to be several years untill fat pipes are going to lots of homes.
But there's good stuff (waiting in the wings) on this front:
Using Zoran's SoftDVD player, digital video playing at a TV-standard 30 frames/second required all the power of a 266MHz Pentium II. Intel's excitement for the market is not surprising. Market researcher Dataquest Corp. predicts that shipments of DVD-ROM drives will surpass those of CD-ROM drives by the end of 1999.
And then there's this to look forard to with Deschutes:
"The chip maker, which says demand is skyrocketing for its 4-way Pentium Pro server, is expected to use its volume production technology to chop prices on 8-way systems. Dataquest says as much as 15% of the PC servers sold next year will be 8-way units. Last year 1.7 million PC servers shipped. "
And China will pump things up.
A. All in all the price could be flat for a few Q's?? - thats my feeling based on all these cycles. Where else are you going to put the $ anyways - KO,Kodak,MOT,McD's? Or stick with the leader in the stongest trend of the century. (eom) |
