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Technology Stocks : Intel Corporation (INTC)

INTC 35.10

+2.3%

Nov 19 3:59 PM EST

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To: milan0 who wrote (41102)	11/27/1997 1:46:00 PM
From: Paul Fiondella	Read Replies (3) of 186894

AMD K-6 233MHz systems are now under $1000 --- are you buying!!! In the first post Thanksgiving advts I find COMP USA selling 233Mhz K-6, 32 MB RAM, 2.1 Gig HD, 24x CDROM,33.6 modem system for $999. The cost of these components (And I used 168pin 10ns SDRAM in my prices) is no more than $740 reseller level. That is a 35% profit margin. As the article cited several posts ago on Toshiba points out people are saying 70% of the market is below $1000. Now some people have said that AMD can't afford to make money at these prices and thus Intel will squeeze them out based on capital availability for new development. Well the CPU in such a system is $258. Assuming it cost them less than half that amount to produce the part then I can't see how such an argument from a profit point of view would hold. From a capital point of view, Intel's monopoly squeeze tactics will not work either. There will always be a partner out there for a company in the CPU business with a product and a ready market. The damage is once again to Intel. Here is the under $1000 market ready to be taken over by a chip that favorably competes with Intel's Pentium II. Can any consumer or business ask for more than this AMD K-6 233 MHz system on their desk? It blows the 166MHZ Pentium systems being sold at the same price out of the water. ============================= When AMD ramps up production next year, I would expect Intel margins to get squeezed even more as it is forced to give up those juicy margins. AMD's strategy is in place. What's Intel's strategy?

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