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To: Goutam who wrote (18890)	11/13/2000 2:28:52 PM
From: Maverick	Respond to of 275872

IBD:GTW,AOL,BRCM Meet At Homes Internet & Technology Monday, November 13, 2000 Gateway, AOL,Broadcom Plan:Meet At Homes Gateway introduces two products that aim to link the Web, PCs and music in an easily installed home network By Patrick Seitz investors.com Investor's Business Daily Gateway Inc. wants to be the company that brings the techies' dream of home networking to the mainstream public. The San Diego-based personal computer company on Friday introduced its first two dedicated Internet devices, both of which link to home PCs. The new devices are a countertop Web viewer designed to use America Online Inc.'s Internet service and a digital music device. Gateway is working with networking firm Broadcom Corp. of Irvine, Calif., to make its vision of the "connected home" a reality. Several factors have prevented home networking from catching on in the past, says Broadcom Chief Executive Henry Nicholas. For starters, such systems used to be difficult to install. "You had to practically be an IT (information technology) manager to configure it and set it up," Nicholas said. "But now we have plug-and-play capability. Our objective is to make it an order of magnitude easier to install than your stereo system." Consumers also have more reasons to want home networking now, Nicholas says. For instance, they can access the MP3 music libraries stored on their PCs and play them on devices in other rooms of the house, he says. Home networks also can share broadband Internet connections. The market is crowded with competitors selling Internet appliances, but Gateway is emphasizing home networking. Rival PC makers Dell Computer Corp. and Compaq Computer Corp. already sell simple Web browsers and Internet music devices. Gateway looks to have an edge over rivals by using its nationwide Gateway Country stores to demonstrate the technology for consumers. 'Instant On' AOL "It needs to be demonstrated to show how simple it is," Nicholas said. "It sells itself." Gateway will start showing off its new Web viewer and music player later this month, with the products available Dec. 15. The company's Touch Pad Web device is designed for use in parts of the home, such as the kitchen, where a PC typically isn't located. It'll feature a customized "instant on" version of AOL that connects the user to the online service when the device is turned on. The Touch Pad can be operated with a touch screen or a wireless keyboard. It will sell for $599 and requires a subscription to AOL. In the kitchen, for example, it can be used as an electronic notepad for family members and for accessing recipes, e-mail and other online data. In the family room, users can access TV and movie listings and online music. Gateway's Connected Music Player will let family members listen to music files in any room of the house from a common music library on a PC. The device can be connected to a user's stereo system or paired with speakers to be used as a stand-alone audio player. Users can create song playlists organized by title, artist, album or genre. It will cost $299. Both devices are part of the Gateway Connected Home, an easy-to-use system that connects PCs and other devices in the home at broadband speed using existing phone jacks. Price could be a problem in selling the new products. At $599, the Touch Pad isn't much cheaper than a more capable PC, says Steve Baker, an analyst with research firm PC Data Inc. of Reston, Va. PCs Almost As Cheap "All the Internet appliances so far have been disappointments in terms of sales," Baker said. "They haven't been able to give consumers a reason to buy one of these vs. getting a PC." PC companies are pursuing the Internet appliance market because the growth rate for home PC sales is slowing, Baker says. The Gateway devices should have a leg up on earlier home networking products because they are simple to install, says Bryan Ma, an analyst with market researcher International Data Corp. The timing could be right, too, because the application of sharing music stored on PCs is expected to be big, Ma says. Gateway has a strategic relationship with Broadcom in home networking. Gateway already is equipping its mid- and high-priced PCs with Broadcom home phoneline networking chip sets as standard equipment. The two companies plan to introduce new products next year to network PCs with TVs, stereos and other devices. One product under development is a wireless Web pad appliance for accessing the Internet from any room in the house. The Gateway-Broadcom alliance plans later to enable customers to watch digital-quality movies on any TV in their homes from a common video library over the home network. Gateway and Broadcom also plan to introduce Internet telephony products. Consumers will be able to give each phone in their home a unique Internet address, which allows phone-to-phone intercom capabilities within the Gateway Connected Home — all using a single phone line.

To: Goutam who wrote (18890)	11/13/2000 2:45:55 PM
From: Joe NYC	Respond to of 275872

Goutama, Part of aggressive capacity expansion as well as aggressive transition to 0.13 microns was based on huge capital gains that Intel was expecting every quarter. I predict that Intel's eps is going to go down in Q2'01. Any aggressive ramp of P4 will make it even worse! P4 should help keep Intel's ASPs high. Other 2 variables are costs and capacity. Although I don't know the schedule of Intel's additions to capacity, I believe there will plenty of capacity available, due to the slower growth / slow Q1/Q2 for Intel to ramp P4 fairly rapidly. I don't know how much flexibility Intel has, but basically they can channel all their spare capacity to making P4. As far as cost of making a P4, the cost of the die will be > 2x of the cost of Coppermine, but the packaging shouldn't be much different. Overall cost may be 2x Coppermine, which is should keep the cost still below $80 (WAG). I think that's acceptable for a CPU with ASP of $500 (as long as it stays there). Intel has a problem with the rest of the line-up, and only .13u will save that. Joe