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Technology Stocks : Intel Corporation (INTC)

INTC 41.41

+2.2%

Dec 5 3:59 PM EST

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To: gnuman who wrote (62216)	8/10/1998 9:21:00 PM
From: Fred Fahmy	Read Replies (1) of 186894

Gene, <In the consumer segment, just about everyone who will avail themselves of these services already has a PC. From this assumption I conclude that the market for this segment is mainly upgrades. I also conclude that these services don't require a lot of power.> Why do you keep dwelling on the users of these services instead of the providers of these services. First, I strongly disagree that "everyone who will avail themselves of these services already has a PC". I don't think that even half of the ultimate population that will use these services currently has PC's. The problem is that these services are currently limited. One day virtually everyone will bank electronically and shop electronically so everyone will have a PC. Less than half of the population currently have PC's so there is tremendous upside potential other than upgrades. But again, even this totally misses the point. The really revenue/earnings opportunity is not from the users of these services but the infrastructure that will be required to provide these services to tens of millions of users. Surely you are not suggesting that large national banks will provide global services using low end PC's. Do you think large corporations that will eventually make a huge percentage of their profits via E-commerce will use low end PC's to keep records, display products, and conduct transactions. IMO, your analysis suffers from two main flaws. First you continue to dwell on the very near term (less than a year out) and second you continue to focus on users and not providers. Do you think today's mainframes and mini-computer applications are going to be replaced by segment 0 PC's?? These are the type of applications that will be used to serve millions of people many of which are accessing them through cheap PC's. These are the kinds of applications that newer generation of Intel chips will be targeted after. This represents huge incremental opportunity that has been virtually untapped by Intel up to now. I guess we'll just have to wait. What you continue to see as a threat to Intel (i.e. cheap PC's) I continue to believe will ultimately be the best thing that ever happened to Intel. Intel will thrive in a world where every household has a PC. Re: Your predictions for this quarter. Again, I disagree but I'm not going to trash you because you have been accurate in assessing Intel's short term performance and I welcome all opinions. What is your opinion of the y2k opportunity for Intel? Don't you think Intel is bound to get a major windfall as PC's around the world are upgraded??? Any chance that such a concentrated surge in demand for PC's could actually drive up ASP's across the industry?? Just a thought. FF

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