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

To: areokat who wrote (32899)	10/7/2000 11:17:35 PM
From: DaYooper	Read Replies (2) \| Respond to of 54805

Maybe intel is not a gorilla and maybe they are. If they are I don't want to throw them out just because they are having temporary troubles.Comments? Whether gorilla or king I would not sell intc when it's trading at the current P/E of 30. Just too dominant in the industry to not play a major role in the next big thing. Seems like SpinCo would be an invaluable asset to intc. Not that I want that to happen but those 1000 top cdma engineers combined with intc strengths, just imagine. Fun, fun, fun. Such an exciting time we live. Rory

To: areokat who wrote (32899)	10/8/2000 2:02:53 AM
From: EJhonsa	Read Replies (1) \| Respond to of 54805

As an Intel shareholder, I can't deny I have some concerns about how well Advanced Micro Devices (NYSE: AMD) is doing and what its improved execution means to Intel. It's good to know that TMF allows its writers to invest in the companies that they talk about. The policies of TheStreet.com and some of the others always came across as unnecessary. From what I can tell, AMD has made no real inroads into the highly profitable corporate market. Until it does, Intel holds the upper hand, since that's where the real money is made. The snafu related to the recall of the 1.13 GHz Pentium III chip is a potential bad sign, as it could certainly hurt Intel's credibility and reputation for reliability. It's that very reputation, and AMD's poor one, that made so many corporations shy away from AMD's chips. This is a very good point. Corporations swear by Intel primarily due to the company's brand name and reputation for reliability. Most IT administrators won't bother with AMD regardless of what the benchmarks tell them. But it should be remembered that IBM once held a similar position in the corporate market. Such ties aren't based on objective facts, but rather a subjective mentality. Thus while they're very difficult to get rid of in the short-term, it's not impossible to do so over the long-term. If you dig deep, you'll see Intel is morphing its business away from desktop processors. In other words, it's reached an inflection point for the second time in its history and is starting to de-emphasize the desktop PC processor and direct more of its resources toward new initiatives. Processors are still an important source of cash, but if you go out five years, it's easy to see how they could be much less so. Ah, that magnificent urban legend. I already went over how the non-CPU-related businesses lost $800 million last quarter. These businesses of Intel aren't an asset right now, but a huge liability. $800 million x 4 quarters x P/E of 30 = $96 billion in lost market value. Maybe this will change in the future, but it remains to be seen. I should also point out that I have trouble finding one non-CPU-related market that Intel's in where it's the undisputed leader. Here's a run-down on a few of them: 1. Flash memory - AMD now has greater market share (30% vs. 25%), and they're also making some high-profile deals as of late (i.e. HP and Nokia). 2. Network Processors - Motorola has significantly higher market share. 3. High-end optical communications chips - Dominated by Applied Micro and Vitesse. 4. WAN Access communications chips - Dominated by PMC-Sierra. 5. Enterprise/home communications chips - One word: Broadcom. 6. Internet data center switches - Foundry offers a lower price/port, Arrowpoint (Cisco) offers better software, and Alteon (Nortel) has superior performance and better software. Intel's also creating some significant channel conflict here by competing against potential network processor customers. One last piece of information: it's expected that the P4, when initially released via a .18 micron process, will yield 100 chips on a wafer as compared to 215 P3 chips. Thus the transition to .13 micron will have to come quickly in order for the P4 to have any chance of providing a significant positive impact on Intel's bottom line in the near future. Eric