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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: EJhonsa who wrote (29241)	8/1/2000 11:58:58 PM
From: kumar	Read Replies (1) \| Respond to of 54805

<<judge Intel by its investment potential, which to me, appears very suspect right now given how its growth's slowing down, and how they have second-rate products in a lot of the secondary markets they're looking for to fuel their growth. >> re Intel as an investment, maybe we should touch base in 5 years time? Intel could make minor tweaks in the chip-to-board socket connections, and AMD would HAVE to follow. it dont work (yet) the other way around. re "second rate products etc", look at MSFT. if u ignore the current stock price, and look at their product suite, I would contend that none of them are "first grade" offerrings. Yet they dominate the spaces they play in. In summary, IMO, Intel & MSFT are similar beasts, with each being an important member of the value chain to the other. cheers, kumar

To: EJhonsa who wrote (29241)	8/2/2000 12:20:39 AM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

>> AMD has taken a significant portion of the retail market, by the way. Hi, Eric. Loved your website, but it would be better with some jungle graphics <gg>. No one said that monkeys can't have "significant portions" of the low end of the market, but it's at the whim of the gorilla. From page 54 of the fm: Monkeys are simply companies that clone the gorilla architecture and offer products 100% compatible with the gorilla products at a discount... They do not have permission to change standards, and therefore they cannot create new markets. Moreover, whenever the gorilla makes any change to its de facto standard architecture, monkeys must stop whatever they are doing and re-engineer their offers to restore 100% compatibility. As such, they are inherently committed to a "read and react" strategy, never able to plan beyond a horizon that is dictated by the gorilla.... The bad news is that monkeys can never create sustainable barriers to entry. That is, their market share is always an illusion, for they have no way to prevent the gorilla from coming in and snatching away their customers whenever it wants. jmho (and Geoff's) uf

To: EJhonsa who wrote (29241)	8/2/2000 11:22:36 AM
From: Bruce Brown	Read Replies (2) \| Respond to of 54805

Eric wrote: All of this just goes to prove my point: judge Intel by its investment potential, which to me, appears very suspect right now given how its growth's slowing down, and how they have second-rate products in a lot of the secondary markets they're looking for to fuel their growth. A quick recap of Intel's latest quarterly report. They had 23% y/y growth in revenues. Microsoft reported 1% y/y growth in revenues. Cisco reported 55% growth in revenues. The underlying fundamental metrics of Intel are very impressive. Laptop microprocessors up 40%, Intel's network communications group grew revenues by 50%, revenue for the 64-bit Itanium processor will begin in the 4th quarter (slipped back from the third quarter due to a delay), sequential demand was up in Americas, Asia Pacific and Japan. In spite of the $200 Million charge Intel took for the MTH motherboard replacement program, gross margins were up to 60.4% (up from 59.4% a year ago). Without the charge, gross margins would have been 62.9% which is up sequentially from the previous quarter of 62.6%. Guidance forward is for gross margins of 63% (give or take a point) which is up from the previous quarter's guidance of 61%. Net margins were 23.1%. Intel has 10.9 times more cash than debt. Intel's Foolish Flow ratio fell from 1.18 in the year ago period to an impressive .87. Another excellent quarter. I wonder what it is you see in those numbers that leads you to believe Intel is a "very suspect" investment? Could you find me some more "suspect" investments that toss up quarterly numbers like that? <ggg> I'm here in Colorado Springs where Intel is launching an impressive new facility next door to LSI Logic and across the street from Agilent. If using the GG as a framework helps you analyze Intel, then that's all for the better. But you can't expect it to give a nice, clear answer each time. Don't take this the wrong way, but it's best to think for yourself on this issue, and not blindly follow what the GG classification of Intel would be. I'm sure that Moore would appreciate it just as much as I would. I have to agree with you on saying that we all have to apply a label to Intel. I continue to believe that within the microprocessor environment, Intel with 85% of the market of the majority of computers/servers/laptops that are used in the world is the gorilla. I also continue to believe that investments that have fundamental numbers such as Intel on a quarterly basis are far from "suspect". BB

To: EJhonsa who wrote (29241)	8/2/2000 11:55:17 AM
From: Tom Chwojko-Frank	Respond to of 54805

But AMD is still just a threat. They have to consistently deliver quality products. Intel is still leading, and AMD following, the architecture. As long as Intel can control the instruction set that's used, AMD will be a step (or more) behind. It's rather telling that Intel will determine what the 64-bit chips will look like, not AMD. When the default projects in MS Developer Studio are to optimize for AMD chips, then I'll worry about Intel. Tom CF

To: EJhonsa who wrote (29241)	8/2/2000 2:44:46 PM
From: the dodger	Read Replies (1) \| Respond to of 54805

"...There's been no discontinuous innovation, but there's a proven substitution threat, and I'm typing from it. AMD has taken a significant portion of the retail market..." (from Intel ) I disagree here a bit...(and this pertains to MSFT as well)...I think there has been a great deal of disruptive innovation...but it's not from AMD...but rather the internet itself, and the growing variety of devices used to access it...and INTC's chief competitor right now isn't AMD, but rather the PDA and cell-phones makers. Perhaps there was the equivilent of a "gorilla" buggy whip manufacturer at the beginning of the last century...and they could concievably STILL be holding their dominant position to this very day...but who would know ? -- or care !!! Both Intel and MSFT have obviously addressed this potential pitfall in their current business strategies -- and will probably always be major players in their respective fields of technology -- but whether they will still be THE dominant "gorilla" forces 10 years from now remains to be seen. td