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

To: xstuckey who wrote (95792)	1/12/2000 12:39:00 PM
From: Road Walker	Respond to of 186894

X, re: "If, at the next decrease, Intel attacks AMD on the price front, we're in trouble and need to be nimble. The analysts will go nuts and the stock price will respond accordingly to the downside." Good post, I agree. It will be a hard decision. On the one hand, you have a competitor presumably gaining finacial strength. In effect, if you keep your prices high, you are contributing to THEIR bottom line. On the other hand, you have a strong business cycle, demand exceeding supply, you would like to see these conditions contribute to your own bottom line. What would you do? John

To: xstuckey who wrote (95792)	1/12/2000 1:11:00 PM
From: Paul Engel	Respond to of 186894

xstuckey - Re: "If, at the next decrease, Intel attacks AMD on the price front, we're in trouble and need to be nimble. The analysts will go nuts and the stock price will respond accordingly to the downside." I agree with your analysis - but let me point out why Intel CAN cut prices on newer Celerons without too much impact. Currently, Intel has been making "adequate" profits by selling Celerons - with a die size of about 150 to 154 sq. mm. - and pricing them in the $60 - $180 range. In the not-too-distant future, Intel will be introducing a "Coppermine" version of the Celeron - essentially a Coppermine with only 128K on-die L2 cache (as opposed to 256K for the Coppermine). My guess is that the die size for this new Celeron should be about 90 to 95 sq. mm., representing about a 37% to 40% REDUCTION in silicon costs. Reducing prices of the new Celeron, Intel should still be able to maintain profit margins - maybe even improve them - since performance will also increase (SSE instructions, 100 MHz FSB, etc.) Paul