I'm beginning to worry about you, Gordon. You rationalize exactly as I do, and everything you say is sensible and logical. Intel has found itself in mild trouble, and things are likely to get worse. Long term, Intel has an implacable opponent with whom it cannot contend: its own past success. Intel doesn't really want to deal with sub-$800 dollar computers, since the microprocessor for the box will bring them considerably less than a hundred bucks, but that is the way a large part of the business is trending. Computer sales will actually be an incredible success story this year, because the number of units sold will increase by more than fifteen percent from an already huge base.
However, to a DataQuest forecasting marketing numbers, or company such as Compaq or IBM that prefers to sell relatively expensive computers, it will be a bad year, since the dollar volume of computer sales will increase by only 3 or 4 percent. The winner is humanity. All those guys who really can't read or spell now will, after a fashion, be able to play games at home. My view, like yours, is that IDTI will be well-positioned with its WinChip to take advantage of the low-end business. They aren't going to become an Intel, but earnings should increase nicely. Telecommunications will also pick up as parts of Asia recover, and Clear Logic might help a bit, though that success is harder to call. At any rate, IDTI has greatly reduced dependence on SRAMs. I'm a vulture at heart, bought a bit of the stock under ten bucks, and am sitting around poking at the carcass waiting for the beast to get up and run again. I think it will. That was a good post you wrote, and I want you to take it to every analyst in town to memorize as a mantra. Patience is what we must have, though I remember the old joke about two vultures waiting for days on a high wire for an animal to expire. Finally, one of them looks at the other and says, "Patience, hell. I'm going to fly down there and kill something!" |
