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Technology Stocks : Intel Corporation (INTC)
INTC 35.10+2.3%3:59 PM EST
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To: Paul Engel who wrote (44041)1/6/1998 11:59:00 AM
From: Patient Engineer  Read Replies (3) of 186894
 
Paul, Re: Rising ASPs

Thank you for the article link. Reading the article does not fill me with optimism for Intel. Kumar is saying that ASPs went up in Q4, but Intel is stuck with 3M unsold chips (mostly the expensive laptop chips). What this tells me is that the market rejected Intel's attempt to increase ASPs and that any upward trend in Q4 will be reversed when Intel cuts prices to dump the excess inventory in Q1. I stand by my assumption that ASPs will continue to fall.

Most of your other points are well taken. I agree that there is a tendency by companies to reward key performers with status PCs. This is the same phenomenon that you see when a sales person is rewarded with an expensive company car. Business has been working this way for a while and it needs to continue just for Intel to tread water. I don't see this as a growth market.

Your comments about Win98 requiring a lot of extra compute power may or may not be correct. I haven't run Win98. Everything I've read has indicated that Win98 is mostly a cosmetic upgrade. My guess is that it will be more demanding for memory than for compute power. A 300MHz P2 is not that much faster than a 200MHz PMMX for most tasks, so I remain skeptical that Win98 will really drive a big cycle of replacement purchases.

I do see the workstation market as an area for growth especially given the trend toward multiprocessing. Intel is so huge that it is hard to see that this one market can deliver the growth necessary to overcome the declining ASPs everywhere else.
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