">$1,000 - what is wrong with the following configuration:
MediaGX 166MHz with integrated soundcard and graphics, 33k modem, 1G hard drive, 12x CD Rom, speakers at $499.99 (Micro Center retail)
add 16 Mb, a reasonable monitor and a reasonable printer - and you have a system that can pretty much do whatever today's programs demand and you still have not spent $1,000"
If this low priced system entices a new user into the computer market, adds an intenet user, they buy a little software, upgrade every 3 to 6 years, (and may not wish to go low end after doing it once) and of course this helps to support the server market....isn't everyone a winner?
"I happen to be long INTC and wonder how foolish I am"
I believe you are 0% foolish. The world is changing and Intel is positioned so well for it. What amazes me is to see Microsoft or Coke with their multiples up so high, and poor Intel down around 19. Sure microprocessors are capital intensive, but that may well be more of a plus than a negative. What a wonderful, legal barrier to entry! Few companies can afford to compete in development of a new chip or building a fab. If I had to compete against Intel, Microsoft or Coke, Intel is the last one I would try to go against. Much easier to get smart and lucky with a software package, or make some sugar water people like than design, produce, and market a new chip.
Doesn't Intel deserve a better multiple for their excellent positioning? Could Merced be the vehicle that makes people realize just how powerful and intelligent Intel is...as they move into new markets, and hopefully with nice margins?
Isn't DEC very happy to be getting out of Alpha and become a "special" Intel customer?
I think Intel could own the low end PC market to whatever extent they wanted, but preditory pricing laws and the old FTC force them to let the little guys stay. But keeping prices low and margins low in that segment keeps them from being strong competition. Low margins in that particular market segment may be a blessing we just don't realize considering the alternative.
Lee
Does anyone have "facts" as to why a p/e of 25 should be to high for Intel, considering the growth rate and positioning?
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