Mark,
INTC is a lot like MSFT in the sense that they are both monopolies in the hottest growth sector around, but INTC has one undisputable advantage over any other company, including MSFT: It is dominant in an industry with very high barrier to entry for potential competitors. To compete in an industry that is working at the 0.25 micron scale now, and 0.1 in the future, requires a lot of cash (5 to 10B for a fab). So, even, with a better product, it doesn't follow that a competitor can affect Intel's bottom line very much.
I know, this is an AMD thread. Well, AMD has enough capacity to take some of the market, but longer term it is not as attractive. I always side with the underdog, and that's why I'm into AMD. If they can get some big time financing, like they have from the German government, then they have a chance of taking more share away from Intel.
The one company that could effectively compete with Intel now is IBM. I have always wondered why they didn't back CYRIX in a bid to compete with Intel. Could it be because Gerstner is not a techie? Or maybe he sees more money to be made in services, like automated banking? It seems all big money ends up in the banking industry, so maybe he's right in choosing IBM's future direction.
On a related note, USA Today shows Magellan's top 10 holdings. Uncle Sam is #1; Intel is #2. Enough said.
Len |
