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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: A. A. LaFountain III who wrote (60826)	6/7/1999 7:39:00 PM
From: RDM	Respond to of 1572132

<TAM in 2002 of $300-400 million> The analysis you present includes only the value of the telephony equipment, but not the servers and desktop computers. I understand thay you are saying that these machines are a part of the 16% growth. While the value of the additional telephony specific chips may be less than $50 per desktop, the value of the CPUs in the desktop and local server many increase this by a significant factor (2-4X?). Some say that the cost must be less than $500/port for mass acceptance. This may limit the Intel content to less than $100/port. The size of the market in 2002-4 varies with the research firm doing the forecast. According to a Frost & Sullivan study released in 1997, the total equipment market for VoIP is estimated to be over $2 billion by 2001 and $16 billion by 2004. These will be primarily telephony gateway platforms that bridge the Internet and public switched telephone network. You can see large growth rate potential a few years out. Other surveys are more optimistic sooner. The home IP telephony market is typically not included in this type of analysis even though AT&T has invested $120+ billion dollars on acquistions of cable companies for home delivery of telephony, and internet services. Hot future technology markets are difficult to forecast with any accuracy when they are five years away. IP telephony is one to be an area that Intel and many others are making large investments in due to hoped for growth. Whether or not it will affect Intel's 2004 sales by 25%, hence a killer app, remains to be seen. I believe that Intel's acquition reflects their confidence in this scenario. As an Intel investor I will wait, watch, and hope.