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

To: Road Walker who wrote (111474)	9/26/2000 8:17:31 PM
From: puborectalis	Respond to of 186894

The people v. Intel September 27, 2000 12:00 AM PT by Ali Asadullah Editor's Note: Every Monday, Ali Asadullah will put someone new on the stand for various crimes related to tech business. Then it's up to you, the reader, to debate the case on our discussion boards. On Friday, Judge Asadullah will issue his verdict, and, of course, the proper punishment. The defendant: Intel Corp. (INTC) The charge: Leading investors down a yellow brick road while it walked the trail of tears The prosecution: Ladies and gentlemen of the jury, the facts speak for themselves. Intel warned on Sept. 23 that its Q3 sales would advance only 3 percent to 5 percent over its Q2 mark of $8.3 billion and that gross profit margins would come in at 62 percent instead of the targeted 63 percent to 64 percent Intel had hoped for. So why the sudden change of tune? As recent as midsummer, Intel was predicting strong growth in PC sales that would boost Intel's numbers for the next two quarters. In fact, Intel could barely make chips fast enough to put into new PCs. Yet less than two months later the scenario is turned on its head? How so? My friends, it is abundantly clear that economic pressures are here to stay. The news is already bad from Europe, from which Intel draws some 20 percent of its revenues. The Europeans do not like Greenspan's tendency to continually jack up interest rates (rates have increased five times this year), and inflation continues to be a concern. Euro Zone inflation was at 2.4 percent and 2.3 percent in July and August, respectively, well above the European Central Bank's (ECB) preferred level of 2 percent. And we haven't even begun to talk about the summer drama in the oil sector that saw leading economic powers wringing their hands over the $30 price tag for a barrel of oil. Heck, European gasoline prices alone could be enough to ruin any hopes Intel might have had of seeing sales above Q2 levels. Even World Bank president James Wolfensohn recently warned that skyrocketing oil prices could dent GDP in developed countries by as much as three quarters of a point. What, Intel thought it would shake off a little GDP decline? So either Intel was not reading the road map properly or it foolishly saw itself as impervious to such pressures. Either way, Intel should have gotten the bad news out there earlier instead of playing traffic cop, instructing rubbernecking investors to "move along, nothing to see here." Guilty is the only verdict to return here. The defense: Ladies and gentlemen of the jury, I have two words for you to describe the true nature of the situation at hand for Intel: weak euro. My friends, currency is a foe that often strikes without warning and when it strikes, it takes few prisoners. Many of you will remember a seemingly insignificant currency called the baht. But when the Thais floated it back in 1996, it became as hard to swallow as that spicy Thai food. The indigestion rippled throughout Asia and impacted Intel and everyone else who had fabs and other business interests in the region. However, that was a much more severe a scenario than the zigging and zagging of the euro, a currency that is much more robust than the baht and most other Asian currencies. The fact of the matter is that right now there is concern but not panic. According a recent European Central Bank report, the Euro is impacting producer intermediate goods, but is yet to trickle into non-energy consumer goods. Intel's announcement was merely a precaution so as to make sure that there were no unexpected surprises in its Q3 report. As for the euro, the United States and Japan intervened Friday to help give the currency some legs. With the credible backing of two leading world currencies, this unfortunate incident could very well take a turn for the better. And that would help put Intel back in the driver's seat. For in no way should Intel's warning be construed to mean that consumers don't want to buy computers. Sure they do. The price points just need to agree with European pocket books and that should not be a problem moving forward. It's true that Andy Grove once said that "only the paranoid survive," but that doesn't mean that investors should flee the stock. Indeed analysts came out in support of the stock on the day after the warning. PaineWebber, for example, reiterated its "attractive" rating on the stock and Credit Suisse First Boston maintained its "strong buy" rating. Intel's warning does not herald the end of PC and chip sales as we know them. If anything, a moratorium on negativity should prevail at least through the holiday season, when sales are historically strong. Should the numbers there be poor during this time, then maybe it's time to review our outlook on the PC and chip sectors. But no one should review anything until after we ring in the New Year. Guilty or not guilty? Discuss Intel's fate with the rest of the jury>>

To: Road Walker who wrote (111474)	9/26/2000 8:21:56 PM
From: puborectalis	Read Replies (1) \| Respond to of 186894

Reuters Transmeta claims five-year technology lead over Intel and AMD TOKYO--Transmeta Corp., the U.S. microprocessor startup, believes its technology is at least five years ahead of industry leaders Intel and Advanced Micro Devices, its chief executive said here today. The once-highly secretive Transmeta burst into the limelight in January when it unveiled its Crusoe chip, which uses software to perform many functions previously done by hardware, enabling lighter PC notebooks with much longer battery life. "For [Intel and AMD] to catch up, they would also need a software based approach. That means they would have to start from scratch and from my 20 years of experience, it would take at least five years to get a new microprocessor out the door," David Ditzel said in an interview with Reuters. Transmeta, which filed in mid-August for an initial public offering, seems to be gaining in stature within the industry and on Wall Street as more and more firms unveil Crusoe-driven PC notebooks. Fujitsu Ltd. is the latest notebook maker to switch to the Transmeta MPU. The Japanese PC maker will use the Crusoe chip in two new notebooks due out in early November. They will be equipped with mobile Internet capabilities and have battery life of up to eight hours, double the standard length for most notebooks, according to Fujitsu. Transmeta is talking to practically all makers of PC notebooks, Ditzel said, and industry sources predict that other Japanese firms are set to follow suit. Hitachi Ltd. is expected to unveil four Crusoe-based products on Wednesday--three notebooks and a Web pad that is like a very large Palm Pilot but with a virtual keyboard. NEC Corp. has also developed a laptop prototype with a Crusoe processor. Transmeta's strategy, Ditzel said, was to go after the "two very big niche markets" with its Crusoe chip: notebooks and Internet mobile devices. "We are aiming to expand the market," he said. Kyodo News Service

To: Road Walker who wrote (111474)	9/26/2000 8:33:40 PM
From: Paul Engel	Respond to of 186894

John - Re: "That can happen when you bury your head in the sand." Thanks for the laugh ! Ol' Chick must have had a bad "lie". Paul