To: Jim McMannis who wrote (93039 ) 2/14/2000 3:31:00 PM From: tejek Read Replies (2) | Respond to
Jim and thread But it lost about half of the National/IDT workforce and sales fell. IDT's market share was negligible to begin with. And the influence of National's Cyrix processor fell last year. By December, the chip's market share in computers selling for $1,000 or less had dropped from 15% in April to less than 1%, the result of Via concentrating efforts on the Feb. 22 launch of its new low-end chip, the Joshua. Funny thing, though: IDT and National's Cyrix dropped out just as demand for PCs surged. As a result, both Intel and AMD have sold record numbers of chips since Christmas. At the Goldman Sachs Technology Investment Symposium last week, AMD CEO Jerry Sanders said the market for low-end chips has been so good that the company would actually see revenue rise or at least stay flat for the first quarter, a time when sales usually decline. Both Intel and AMD have scored big on the Street as well: Since Oct. 19, Intel shares have risen 66%, closing at 108 Friday, while AMD shares have risen 161% to close at 42 15/16. But financial analysts are skeptical of the Joshua's potential, since it is based on Cyrix technology they say is outdated. "If you look at the Cyrix core, it's 2 years old," says U.S. Bancorp Piper Jaffray analyst Ashok Kumar. "I'm sure Via can push it down some rat holes." Both AMD and Intel have redefined the low end of the computer market, he says, by selling chips that run at speeds of over 500 megahertz at prices low enough to go inside computers that sell at less than $600 retail. A year ago, computers powered by chips that fast would sell for $1,200 and up. Soon, the speeds for budget computers will top 700 MHz, Kumar says, and Via will not be able to compete. (Piper Jaffray is not an underwriter of Intel, AMD or Via.) But it won't be easy to edge AMD and Intel out of the boxes. Intel, for instance, is so determined to keep Via at bay that it asked the International Trade Commission in January to investigate whether VIA is infringing on Intel's patents, a finding that could prevent VIA's chipsets and/or microprocessors from being sold in the U.S. Via's Hays says the company can undercut Intel and still generate profits. Unlike Intel and AMD, he says, Via contracts out manufacturing and so doesn't have to spend to operate expensive plants.
