Andy-
I don't think that INTC is overpriced, compared to MSFT or DELL. I am a bear on MSFT. I see it taking the same path as AT&T did in the late 70s and early 80s. I suspect Apple will ultimately fail (and I'm a devoted Macintosh user), leaving MSFT with a complete monopoly in operating systems (it's pretty close to an absolute monopoly right now. MSFT also has a near monopoly in the word processing market, as well as several other applications). The DOJ will break up MSFT if this happens.
I'm not exactly sure how it will happen (perhaps into 3 parts: A content/media company, a networking and applications software company (e-commerce, IE, Word, Excel, etc.), and an operating system company). But unless some other company buys the MacOS, MSFT will be busted up. MSFT doesn't want Apple to fail, so it provided an equity infusion. But there are limits to MSFT's "charitable" actions toward Apple.
Here's the problem for MSFT: It can't buy too much more of Apple stock, because eventually it will be deemed a controlling stockholder of Apple, thereby effectively owning the MacOS market share. The DOJ will not like that.
The only way that I see MSFT extending its reign as a single company is through a buyout of Apple (or at least its MacOS). In order to compete with MSFT and recapture some lost market share, a big company with strong marketing capabilities will need to be the buyer. I suspect IBM will be the buyer (interesting twist of fates, no?). If it can redesign the MacOS to be compatible with standard PC hardware (except it would use the PowerPC chip, which is superior to the Pentiums) and convince software designers to write software for the MacOS, more people would buy the Macintosh. Eventually, IBM's tremendous marketing efforts would significantly increase the MacOS market share from its current 4%.
On the other hand, maybe THQ will buy MSFT in 10 years.
Todd |
