BedTime for Intel or Kurlak??? Message Board

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Strategies & Market Trends : BedTime for Intel or Kurlak???

INTC 41.50

+5.0%

Oct 28 3:59 PM EDT

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To: JR Medlar, 2nd who wrote (4)	4/16/1998 10:16:00 AM
From: Steve Porter	of 29

JR, The PII 350 & 400 MHz will help Intel's margins, but not their market share or volume out at all. The celeron is a piece of junk and won't sell well at all. It may even add to INtel's inventory problems. Something interesting that came out of the AMD thread was that Intel said that 50% of all sales were now PII based. Then people got to thinking and it was confirmed that INtel was talking about revenues. A lot of analysts were hyped that 50% of sales were PII, but they were thinking it was units, not $$. Considering the ASP of PII parts is twice the ASP of the PMMX that means that 66% of unit sales are PMMX. This is not good since Intel also said in the conference call that they have stopped PMMX production. What is going to happen when the channel eats them all.. sure Intel will make some money, by then 66-75% of revs may come from PII, but their market share will tumble by at least 15%.. If Intel looses 25% of revs and 15% of market share, what do you think that will do for the stock price.. drive it through the floor. I think Intel is really goofing this one up. Usually I can't fault Intel management (only their design teams and/or pricing strategies), but this time I think they have made a HUGE mistake. Even if they realize their mistake and start cranking out PMMX again (say at 266 and 300 Mhz), they will still loose at least 5% market share (one or two OEMS will have moved onto AMD or Cyrix Socket 7 solutions). I just can't see Intel not going to 60 (which is the whole point of this thread).. and if they aren't careful I can see Intel at 40 in 6 months. Not a pretty picture I know, and I will be the first to admit I'm not an Intel fan... but when it comes to just analyzing the industry, I feel I can be as objective as the next guy. Steve Cyrix/NSM Rule!

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