Being and investor in Intel you have to determine if you are short term or long term. If you are long term, below are some interesting comments from an MIT study group you might ponder:
The largest threats facing Intel today:
- A Market Paradigm Shift: What if technology at accelerating rates became "unnecessary"? What if the SC market hit a physics wall, by which further shrinks became much more delayed or impossible? From Intel's perspective, our thoughts are these possibilities will arrive with fair warning, much like the network computer did. Andy will see it in the distance and react in time. nonetheless, changing the rules in the market presents the biggest payoff to Intel's competitors.
- Market Slowdown: This affects all SC players and shouldn't be viewed as a good thing. Besides, Intel has a history of losing less than everyone else during these times.
- Andy Grove's Temporary Status: forget about the prostate, sooner or later Andy will be gone from the head of Intel. What kind of succession planning does Intel have in place? Not much of one, according to our Intel sources. Many inside of the company feel that Andy is too caught up in making Intel successful today that he hasn't put forh a vision of post-Grove Intel. Many inside feel that when he leaves, the good times will go with him.
- A Copycat finally catching up: Not just a 6x86, but an entire solutions run for the money. Is anyone capable right now? No. For the near term? No. this brings us to:
- A New Player entering into their market. What if Samsung buys Cyrix? It took many years for Intel to make AMD die down. An even bigger player buying on of the three existing CPU design teams poses a significant challenge Intel, but the new player has got to be hungry.
- Collusion: what if Compaq, IBM, PB, HP, and NEC got sick of
Intel's bullying and collectively put their lot with Cyrix or AMD? Who would win? That's 32% of Intel's NR. Anything but maniacal growth slows down the storm: less R&D, less Intel Inside TV ads, etc..
Calling to mind Porter's 5 forces in Intel's solutions industry:
1) Suppliers: weak in the SC industry, no real market influence.
2) Buyers: stuck with Intel, comply out of necessity.
3) Potential Entrants: barriers to entry are extensive, chance of failure is great. Timing, skill, speed, and volume must be perfect.
4) Substitutes: Are there any MB or chip set companies giving Intel a run? Save maybe LAN, Intel has a competitive advantage in almost every market it plays in. These all affect.
5) Competitors/Rivalry: There isn't much of one anywhere. As much as all of the other SC players need to be in the PC segment more, Intel's grip on the largest portion is only gaining.
- PLAN FOR THE LONG TERM: No one is going to catch Intel in 1997. Someone may in '99, 2000 or thereafter. Intercepting them further out into the future is more feasible and allows us some leeway and room for creativity.
Some interesting final notes on what we should expect from Intel in the next 2-4 years:
1) Intel faces internal disappointment if Andy is too focused externally. They've done a great job of clicking over the last 2 years, but the potential to slip is growing stronger as Andy looks further outward. Potential weaknesses currently exist in either manufacturing or in devising the right beyond-silicon solutions (MB configs, etc..).
2) Intel has a habit of knocking out any critical path that slows its
growth: manufacturing, chip set design, MB design and manufacturing, lack of name-brand recognition, etc.. A new critical path will begin to form a barrier: Microsoft. Their 64-bit code isn't coming out for a few years, meanwhile the P7 will need something to chew on. As much as they've tried to avoid each other, don't be surprised if Intel increases its software activity to include new capabilities for existing NT programs. |
