Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 34.50

+2.6%

3:59 PM EST

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To: Reginald Middleton who wrote (57357)	6/5/1998 9:23:00 PM
From: Paul Fiondella	Read Replies (2) of 186894

Never underestimate IBM They clearly have the ability to compete with Intel in both the design and manufacture of CPU's. You may recall their copper technology innovations. However in the area of 8086 compatible CPU's where Intel has the edge there is no IBM design, so as IBM has done previously, it goes and finds somebody that can produce the chip and buys it --- in this case AMD. IBM is also more diversified as a corporation than INTC (both in products and markets that it participates in). A slowdown in the PC industry, if it remains focused on the PC industry and does not spread up the food chain would weaken INTC vis a vi IBM. IBM is also well aware of the Wintel weed that took over its garden. It is heavily invested in areas of the server market that Intel has now delayed entry into. So I wouldn't bet too much on Intel's expertise overcoming its weaknesses in competing with IBM. IBM also has a far better understanding of software and service than Intel can ever hope to obtain. So IBM has the advantage in research, in service, in software and in the server and DP markets. Although this is only a small point in the discussion it is never the less a strategic one when it comes to the politics of the industry. IBM needs to have both AMD and NatSemi viable in the PC arena to keep Intel from consolidating its monopoly. It has learned a greatdeal from its WIntel experience and is working to undermine market dependance upon both MSFT and Intel. Other issues you raise are a matter of serious further inquiry. Does the Celeron compete at price/performance levels to AMD's chips with the new price cuts? Since prices change this is something to follow. Will Intel outprice AMD? (Well what happens to their business model if they do this or do you see that model having changed?) Does AMD have a capital crunch in its future based upon FAB construction needs for its existing product lines? Will compression hurt AMD more than INTC in terms of share price? (hmmm 18 vs 70, who can shrink more? be sure to figure in panic bailing out of a sinking stock) Being able to pay your bills. (Poor AMD!) ==================== In the end its not what Intel does to AMD but what Intel does to its investors (those who hold the stock at prices based upon very high expectations). I look forward to other people contributing some answers to the questions you raise.

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