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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: kash johal who wrote (95573)	1/10/2000 4:12:00 PM
From: Paul Engel	Respond to of 186894

Kash - Re: "I don't recall the president of GTW saying they were pissed off with AMD in a public forum. In fact GTW seemed to go out of its way and stated that they eveluate vendors from time to time etc." At the time, Gateway was not looking for an ALIBI for missing their quarterly earnings goal - during an EARNINGS WARNING PREANNOUNCEMENT. Paul {=========================================} Gateway Plans to Stop Buying Chips From AMD in Phase-Out By GARY MCWILLIAMS and DEAN TAKAHASHI Staff Reporters of THE WALL STREET JOURNAL SAN DIEGO -- Gateway Inc. plans to phase out microprocessor purchases from Advanced Micro Devices Inc., another sign of Intel Corp.'s renewed gains in the price-competitive, consumer personal-computer market. Gateway, which in February brought out its first PCs using AMD chips, won't continue with purchases after its current models are replaced, according to people close to the matter. A Gateway spokesman declined comment other than to say the company continues to sell existing PCs using AMD chips and won't preclude AMD from future bids. Analysts said the phase-out wasn't unexpected. Gateway had recently spurned the Sunnyvale, Calif., chip maker's latest high-performance Athlon chip, the device that represents the company's best hope for a return to profitability. "There was very limited intention with AMD," said David Wu, a director at brokers ABN AMRO Inc. The loss comes as Intel has mounted a strong comeback supplying consumer-PC manufacturers with its Celeron microprocessors. In July, PCs built with Intel chips accounted for nearly 56% of retail-store PC sales, up from less than 38% in February, according to market watcher PC Data Inc., Reston, Virginia. In contrast, AMD's share of those sales tumbled to 30% from 52% over the same time period. People close to the matter say AMD believes it lost the Gateway business because Intel began offering Gateway more favorable terms than it had previously. Neither Gateway, Intel nor an AMD spokesman would comment. Gateway, the leading U.S. supplier of home PCs, is also in the midst of paring its product roster and saw the AMD-based models as requiring separate investments for the core circuit boards at the heart of the machines, those people say. Martin Reynolds, vice president of technology at industry analysts Dataquest, a Gartner Group company, said Intel's newest Celeron chips also allow designers to use the same circuit boards on future, higher performance Celeron chips. "There are big savings there," he said. Mr. Reynolds also said AMD's decision to shift resources to the high-performance chip has given Intel the upper hand in the price-sensitive consumer PC market. "What's happened in the last year is the infrastructure for the [Intel] Pentium IIs and IIIs have caught up" with AMD, he said.