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

To: saukriver who wrote (36466)	12/12/2000 11:14:27 AM
From: Mike Buckley	Respond to of 54805

You say Intel is a gorilla, but you also say more precisely that it is a gorilla of "earlier-generation PC-based chips." Remember that this is only one way of looking at Apollo's construct, a construct I don't agree with. Even if I bought into the "Intel is a gorilla" position, isn't being the gorilla of "earlier-generation PC-based chips" a bit like being the dominant supplier of handwringer washers or the gorilla of mainframes? Regarding washers, no. That's a royalty play. Regarding mainframes, yes. Also, I am not sure you can point to many markets for other types of chips where Intel is a king. It may indeed be a prince in many and shut out of others. I'm sure that I can't. :) That's because I don't follow those sub-industries closely enough. However, if Intel isn't a king in most markets, and if Intel isn't a Gorilla, how can it be logically deduced that it's a super King? --Mike Buckley

To: saukriver who wrote (36466)	12/12/2000 11:27:10 AM
From: John Stichnoth	Respond to of 54805

Re Intel as Gorilla. They are able to define the form of the product, defining how many pins the CPU has, for instance. They've changed the form of the product several times, already, and with the P4 they will do so again. And motherboard makers around the world have followed their lead as their top priority. The SSE/SSE2 attributes are theirs, and aren't they proprietary? A significant value chain has developed around Intel's architecture. This is seen most famously by the sharp deference Dell and Compaq--the two dominant princes of the desktop market--display for Intel. Software developers "optimize" their products to run optimally on Intel's products. How better can you define Gorilla power? btw, I'll take issue with Uncle Frank's 6-points in defining a gorilla. His list is being viewed out of context, if my dim memory is correct. His 6 points are a good description of the gorilla we are looking for. The points that require a tornado aren't inherent to older silverbacks. IBM remains the Gorilla of the mainframe, even though that segment is long past its tornado. Intel's desktop-CPU tornado is similarly fairly far along the growth curve. The issues in deciding whether Intel is attractive as an investment is not whether it is a Gorilla. Instead, it's issues like: Are you satisfied with being in a company that is past its hypergrowth phase? Are their significant areas outside the desktop that Intel can dominate that will earn it a second hypergrowth period? Is the stock price cheap enough that it reflects the diminished growth prospects for Intel?