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Technology Stocks : Intel Corporation (INTC)

INTC 35.71

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12:05 PM EST

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To: Road Walker who wrote (44204)	1/8/1998 7:09:00 PM
From: gnuman	Read Replies (2) of 186894

John, re:"boxmaker brand recognition". There's a lot to what you are saying. Especially in the home PC market, which I think you're addressing. Most people make a choice of manufacturer before they look at what's inside. The manufacturers reputation for quality, service and support, (brand recognition), are the first decision maker for most people, whether buying a TV, Cofee maker or PC. You can usually buy a Packard Bell PC at a price point below a similarly equipped Compaq machine. I think one of the reasons Compaq replaced PB in the low end is due to PB's poor rating for quality, service and support. HP's recognized high quality is another reason I think HP is becoming very succesful in the market, and IBM of course has always had a stellar reputation. Once you've decided on the boxmaker you may take a look inside. If you're convinced Intel is the only way to go you have that choice. And Intel has done an outstanding job of influencing that decision point. The majority of people will make that choice. But for many people the fact that someone like Compaq or IBM has chosen to put an AMD chip inside doesn't degrade the quality of a product. They expect the same quality no matter what's in there. Some people wondered why it took so long for Compaq to make the AMD decision. I think part of the reason is Compaq's extensive quality assurance program. I know from experience that it can take six month's or longer to get QA approval at Compaq. In the case of a CPU I'm sure they put maximum effort on QA. After all, Compaq's reputation is also riding on that decision! Their choice of AMD for some products has provided AMD with an invaluable amount of "Good Will" and "Brand Recognition". This probably upsets some people at Intel as much as the price erosion they seem to have created. The consumer is the big winner! And of course, Intel will always be the winner in this market. But with a slightly different spin.

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