What happens after 2H98?
You wrote:You paint a bleak picture without providing any material information to dispute two main points in Intel's guidance to analysts.
1. Intel will maintain GPM at about 50%.
2. Business will improve 2H98.
I agree that Intel has provided guidance for better margins in the 2nd half of 98, and I've admitted that in my posts. My posts have been directed toward calendar 99, for which Intel has provided little financial performance guidance. Kurlak is pointing out the strong probability, almost a certainty, of a market share fight in 99.
As for the 50% gross margin figure, most people on this thread have assumed that this means there is a floor of 50% on Intel's margin shrinkage. That's not what they said, or meant. They said over the long term, they expect the gross margin to average 50%. This means there could be periods when the margin drops below 50% into the 40s. And I think that is most likely to happen in periods like calendar 1999, when their market share will be under pressure.
The stock market tends to look six months out, and in six months and two weeks, it will be 1999. Rather than fixating on Mr. Kurlak's personality, why not focus on the ideas? Stooping to personal attacks is non-productive (non value added). I find that although he has oversimplified in parts of his analysis, there appears to be a significant probability that his forecast of a price cutting grab for market share could come to pass. As as result, he has holds on all three sector players.
Paul
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