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Technology Stocks : Intel Corporation (INTC)
INTC 34.50+2.6%Nov 21 9:30 AM EST
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To: Mary Cluney who wrote (41119)11/28/1997 1:41:00 PM
From: Paul Fiondella  Read Replies (2) of 186894
 
More on the business model

If I gather your points correctly you believe Merced is the key to Intel's business plan. Essentially that large corporations will replace their remaining "legacy" systems with new Intel high powered Merced machines.

Well as it stands now, there is a company called IBM, whose stock is reaching all time highs, which will release a 64bit processor in 1998, a year ahead of Intel.

Since UNIX is still the predominant system on the kind of boxes Intel's Merced will be targeted to replace (read SUNW) and I assume you are not waiting for NT to replace UNIX, then IBM already has Merced checked. IBM plans to replace legacy systems with IBM systems, naturally.

Now as to the low end market. My point was that at the time of the introduction of the PC it was UNDERPOWERED compared to anything being used in industry. Nobody bought the PC because it was faster than a VAX. They bought it because it was cheaper than a VAX and could do some of the same things (alla spreadsheets, wordprocessing etc. etc.)

This is what some people seem to have forgotten. Intel got into the business making cheaper alternatives to other computers out there. These computers were good enough for many tasks.

Now what does that say about the criticisms of AMD and Cyrix and their business models coming from many people here!

Clearly if you can buy a AMD K6-233MHz computer for under $1000 that can do anythign and everything you would ever want to do with a PC, and if Intel doesn't want to compete on price rather than performance, I see a serious problem with the business plan.

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And of course I didn't mention Lucent's new transistor technology which if implimented in a viable product will present yet another problem for the Merced strategy.

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