Paul, >>>AMD's strategy is in place. What's Intel's strategy? <<<
The reality is, for the full year 1997, Intel will have sales closer to $25 billion than AMD will be to $2.5 billion.
If you looked at net income, the situation is even worse. AMD's net income will be negative whereas for the full year 1997 Intel will have net income well over $6.5 billion. This means that even if AMD had no expenses - didn't pay their employees, didn't have to pay taxes, rent, raw material, didn't have to pay Mr. Sanders - Intel's net income would still be almost triple AMD's.
Take a look at the balance sheet. Intel has almost $10 billion in cash and long term debt under $400M. AMD has $512 million cash on hand with long term debt over $650 million.
The reality is that even if AMD is to survive,(in a financial sense - AMD's survival is not guaranteed), it will be years before AMD is truly competitive. Competitive like Hyundai is to Toyota, or Burger King is to MacDonalds, or Apple is to Dell.
Having said all this however, I believe that AMD can survive and maybe even thrive. But, they can only do so only if Intel is thriving and AMD is able to capture an acceptable market share - say 25% of a $100 Billion dollar market. They are more likely to suvive and to thrive only if Intel can expand the market and Intel can convince analysts that the industry deserves a much higher PE. In this area, convincing Analysts that this industry is in the forefront of technological importance, Intel is really doing a poor job.
This is not a zero sum game. In fact AMD can only succeed if Intel becomes more successful - not less.
Mary
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