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

To: Rob S. who wrote (111142)	9/25/2000 9:17:04 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 186894

Being able to sell expensive microprocessor chips to the high end of the market, as you suggest, is a high margin business. Instead of selling, say, 100,000 microprocessors at $700 a unit, what if Intel is able to sell 7 million communication chips with embedded memory at $10 a unit? If the chips in either situation are proprietary, then the margins on either are likely to remain high. The other issue that your well founded comments suggest is that companies often have trouble moving from their traditional strengths to new profit centers. IBM always made good profits on mainframe computers but had difficulty making a profit on PC's, even though it makes many of its own chips. Xerox has always been the leader in high end copy machines, but is far less successful in home office or small business copiers. Sometimes companies just can't make the transition to markets where growth is higher. Whether Intel can make the transition is partly a management question. From my own study of Intel, I'd say their quality of management is such that the likelihood of success is much greater than for IBM or Xerox.