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

To: saukriver who wrote (36315)	12/9/2000 5:27:01 PM
From: Mike Buckley	Respond to of 54805

saukriver, What I do not see people arguing on this thread is that Intel is a gorilla merely because the authors in the book say it is. If you had initially characterized the possibility that Intel is a gorilla because the book says so, I would have instantly agreed with you. In addition to the issue of Intel as an example, we've also got the examples that none of us got excited when we disagreed with Moore's proclamations that Qualcomm was a prince and JDSU is a Gorilla. --Mike Buckley

To: saukriver who wrote (36315)	12/9/2000 6:13:54 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

What I do not see people arguing on this thread is that Intel is a gorilla merely because the authors in the book say it is. The people on this thread--yourself in particular--tend to apply, question, re-apply, examine and re-evaluate the factors the authors laid out to try to determine for themselves whether they think... This far in the sentence I would agree with you heartily and say that not only is this true, but it is one of the important factors leading to the quality of this thread -- this is not a group of people who are parroting the pronouncements of the guru, but a group which has internalized the concepts and perspective and applies the technique with its own understanding. The mere fact that the book says Intel is a gorilla does not make it so. Clearly, as a group, we do not accept or agree with everything in the book; this goes along with the above observation of the character of the group. However, you must admit that Intel having been one of the core case studies leading to the book, tends to give the classification a bit more weight than a casual remark somewhere. There is a contingent on this thread ... that believe Intel is a gorilla of PC chips. In all the give and take on this topic, it seems to me that there are two keys focal points. One is the "gorilla of X" question which comes up with many companies. Depending on how one defines X, many companies can, at least initially, seem to have a gorilla-like dominance within that sphere. I say "gorilla-like" because I think that closer examination often reveals that true pongid characteristics are missing and that one merely has a very strong company, a king, perhaps, within the X market sphere. In Intel's case, I think one needs to be clear that those who feel that Intel is a gorilla, do not think that they are a gorilla in every market in which they participate. I believe that the one and only market where gorilladom is claimed is microprocessors for the desktop market, possibly for the laptop market. While they have leveraged this base into a strong presence in the server market, they certainly have nothing like the same market share there. I disagree with the conclusion of this camp because I am not convinced that Intel has proprietary control over the PC chip architecture. That suspicion is based on the breadth of Intel's license to AMD. This, of course, is the other key focal point. From my own perspective the issue isn't the license, but the control. We all seem to agree about QCOM's gorillaness, but virtually all their revenue comes from or will come from licensing. The question is who controls the architecture. AMD's license is for the 386 architecture. We are now several generations beyond that. Who created those new generations; who was able to control the market to require compatibility with those generations? Going forward, I agree that Intel faces some interesting challenges. There is the internet with its possible defocusing of the emphasis on the desktop system. And, there is the divergence of technologies represent by Intel's own non-x86 new architectures and AMD's x86 compatible 64 bit approach. But, these issues are essentially substitution threats, changes in the underlying market. For history, the case for gorilladom looks awfully strong.

To: saukriver who wrote (36315)	12/9/2000 7:23:11 PM
From: LindyBill	Read Replies (1) \| Respond to of 54805

Heck, it may even challenge Lindy; didn't he purchase Intel this week? I figured them for a beaten down King that should rebound, and still a core holding in G&K. But, I only took a 5% position. I agree with you that the most surprising thing is that they can't get their public relations act together. The numbers are not that bad, but they project more than they will get, and then have to retract. Very poor PR. Next week should be interesting. With the weekend turmoil, I don't have a clue which way the market will go Monday. I would like a 10% dip, so that I can gobble up some semi-bargains. I am about 50% in the market at the moment.

To: saukriver who wrote (36315)	12/9/2000 10:02:29 PM
From: Apollo	Read Replies (1) \| Respond to of 54805

Sauky, Appreciate your questions on Intel. Their argument is that Intel has proprietary control of an open architecture for PC chips, has enjoyed tornado-like revenue growth, has a developed value chain, etc. I disagree with the conclusion of this camp because I am not convinced that Intel has proprietary control over the PC chip architecture. The way I see it, there are a couple of things that stand out here. First, I think the reason people disagree over whether Intel has proprietary architecture is because............nobody knows the truth. We can all agree that Intel dominated the x86 lines; but now, in recent years, we're beyond these into advanced Pentium lines, and moving to 64 bit architecture.......a new frontier for generalized, widely adopted microprocessors. On this thread, we don't have an Intel guru, or microprocessor guru to give us direction on this. And Intel isn't glamorous enough to motivate non-gurus such as Dancelot or Apollo into abandoning their main pursuits to do the in-depth DD necessary to answer this question. So, in summary, we'll continue to debate, but their hasn't been any compelling information brought forward here to best answer the question as to whether the PC desktop/notebook MPU by Intel represents proprietary architecture that the value chain MUST have. The reason the pro-gorilla camp makes its case, is because Intel seems to continue to dominate its value chain. But to be truthful, this may be simply the result of a Super-King, in that the combination of mountains of cash, R&D, engineering talent, and that fabulous and huge amount of FAB capacity, gives Intel the means to carry on and on and on. The fact is, Intel just smells like a gorilla. The competition has been wavering, with Transmeta being non-competition at present, with the dropping out of several smaller microprocessor companies this past 2 years, and with AMD making a nice run, but now announcing it will stick with the lower end in their road map for the next 18 months or so. But you are quite right, in that nobody has proven that Intel has proprietary architecture at this moment. Nor have you or others proven Intel does not have the architecture. It remains an open question. BTW, Moore has said that Intel actually tornadoes (only gorillas do this) with each chip rollout. Therefore, if he is right, the new Pentium IV, which is the biggest newest generalized chip since the Pentium II, should tornado from 2001-2002. Apollo