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Technology Stocks : Intel Corporation (INTC)
INTC 35.53-1.1%Nov 14 9:30 AM EST
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To: John Carragher who wrote (66986)10/18/1998 4:28:00 PM
From: exhon2004  Read Replies (2) of 186894
 
John:

Thanks for posting NY Times article. The author makes the following claim:

But the climate has changed. The big demand drivers are the Internet and electronic commerce, which are limited less by microprocessor power than by bandwidth. And on most of today's real world applications, there is little benefit in upgrading from a 166-megahertz Pentium to a 300-megahertz Pentium II. Windows 98 does not require more power than Windows 95.

I would argue that this is currently priced into the stock. I also do not agree with the argument. Many PC buyers will buy what they consider state of the art at the time to push out future obsolescence of their purchase.

I bought a 450Mhz PII for around $1,900, before upgrades. While not arguing that other buyers would emulate me, one compelling reason I went with more computing power than what my current needs dictate is to be prepared for whatever power hungry apps I may want to run in the near future. If a killer app emerges that does push the performance envelope, holders of Intel stock will get a jump in the value of their holdings.

When I bought my P90 in 1995 there were 486's that would run windows 3.1 just fine. Today my kids are running interactive educational cd's on the P90. The 486 would not have been fast enough to hold their interest. By buying, what was then, state of the art, I'm getting extra years out of the machine at the end of it's useful life.

Best Regards,

Greg Gimelli
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