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Technology Stocks : Intel Corporation (INTC)

INTC 48.26

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3:59 PM EST

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To: Mike Taylor who wrote (34286)	10/8/1997 12:28:00 AM
From: Fred Fahmy	of 186894

Mike, I happen to disagree with this notion of low end PC's taking over the world or that Cyrix and/or AMD have an advantage in this area. I have seen Pentium systems selling for just a few bucks more or for the same price. Even Micro Center when they came out with their 500 PC came out with a slightly more powerful PC for just a little more based on a Pentium. The great thing about Intel is that they always have low end chips that they can sell for cheap, as cheap as they want. These are simply their older chips. While others are designing and targeting low end chips, Intel simply can change the price point on older chips they have been selling for months or years. From what I understand, Dell's far east business is growing very quickly with just Intel chips. IMO, low end PC sales are not coming at the expense of higher powered machines but are incremental. These are being sold to people who otherwise would not have bought any PC. Mid and high end PC's will continue to sell to the same market they always have. In addition, notebooks (which are at the very high end of revenue and profitability) are exploding and Intel is even more dominant here. Many of the big box makers like Dell have no interest in selling low end boxes. Indeed, CPQ is more the exception than the norm. PC vendors want to focus on higher end not lower end machines. That's why Micron and Gateway recently acquired server companies. The big bucks and margins are on the high end. <IBM had no choices for many many years. It's no wonder the majority of their PC revenue and earnings comes from Intel.> IBM sold Cyrix based products since the 486 days. They did have a choice but found very little demand for these products. I guess we'll just have to agree to disagree. I see no reason why any of the box makers currently loyal to Intel will feel at all compelled to offer Cyrix or AMD products. Some undoubtedly will, especially 2nd and 3rd tier, but most will not. As for as generous pricing....you seem to keep forgetting that Intel controls pricing for the industry. Intel can and will offer whatever price necessary whenever necessary to keep whatever business they want. FF

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