Brian,
For the 1st time Intel has some serious competition in the MPU
market. Why do you think they have had difficulty with their margins
and earnings expectations. Intel, up to this point, has been able
to charge premium prices for its processors because they were the
innovator and the standard and had minimal competition. That has
changed, the reason is AMD and CYRX, which actually make a better
MPU's than Intel (x86) and can charge lower prices because they
don't have the huge overhead expenses of running such an expensive
organization. Intel has overlooked the <$1000 computer market which
is the fastest growing computer segment in the world and CYRX and
then AMD are targeting this market by developing very fast and multi-
functional MPU's with many built in features that will eliminate
the need for additional cards such as modems, ethernet, 3d video,
etc, and producing them for about $35-60, with ASP's of $250-350,
far below what Intel can tollerate and make any appreciable margin
to show profitability. In 1998 AMD is targeting 15M MPUs sales and
CYRX/NSM should be producing 5-10M by year end.
Both of these companies will have 400MHZ CPU models available in '98,
and at costs that Intel may find will minimize their market dominance.
Do some research on the design goals of these companies and the markets they are targeting and I think you will be "enlightened" as
to why Intel has had to shift gears and re-strategize their future
product development and growth.
Regards,
BB
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