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

To: Mary Cluney who wrote (124406)	1/8/2001 1:13:36 PM
From: Gary Ng	Read Replies (1) \| Respond to of 186894

Mary, Re: I could understand it if Intel's policy was to grow only through organic means. But, that is not the case. They do make acquisitions. The acquisitions they do make are however always on the timid side. They are never home runs and they are rarely debacles (that we know of). My observation about Intel's acquisition is that they would never go after those already very successful firm paying high premium but rather more interested in firms that is struggling or need their help badly. This may sound like bean counters but it may not be as stupid as it looks initially. Take DEC as an example, many people laughed at Intel of not taking up Alpha, the so called best CPU architecture, and instead go after StrongArm. Today, Intel's CPU almost surpass Alpha in terms of performance but XScale(StrongArm) seems to have a very bright future. Intel's approach in graphic chip is another, people laughed at its i740 project and the acquisition of C&T which on first look seems to be a failure. But look at the highly successful i810/815(the main reason why a better performance Duron can't compete with Celeron) which use the work of these failure product/acquisition, one may have a second thought. gary

To: Mary Cluney who wrote (124406)	1/9/2001 1:22:20 AM
From: Paul Engel	Read Replies (1) \| Respond to of 186894

Mary - Re: "I wish they had some business minded resources (with some creativity and guts) to draw on - like John Chambers or Scot McNealy." Maybe McNealy was the fellow that decided Sun didn't need Error Correction on their Cache for their E10000 server products. Ever think of that? Paul

To: Mary Cluney who wrote (124406)	1/9/2001 4:24:43 AM
From: Amy J	Read Replies (1) \| Respond to of 186894

Hi Mary, RE: "I could understand it if Intel's policy was to grow only through organic means. But, that is not the case. They do make acquisitions. The acquisitions they do make are however always on the timid side." --------- Folks understand that Intel isn't a Cisco on their valuations, so it's been known that council can steer a company away from Intel. This can actually be good for Intel shareholders because it saves money. Unlike some other companies, Intel's management seems to be financially prudent. Some companies act like high school kids when they enter a deal - they start bidding each other in an impulsive fashion in the goal to win, only to find that the real winner was the one that didn't waste the money on a bid. The downside could be if Intel misses a good deal, but even that might be okay, since Intel seems to have a different style than say Cisco. Intel tends to grow from within, organically as you said, and when they don't, they tend to only extract a few pieces here and there from the outside. It's a more frugal way to do it, and so far, it is probably better than spending big bucks on another company. The risk is lower too because they spend less money - building it yourself costs less in RND than buying it. In the case of potentially missing a good deal, Intel can move fast, building it organically, if it comes to that. Unlike Cisco, it appears Intel's culture is more of a manufacturing company where acquired companies conform, rather than operate independently. For example, there was a press release that John Fowler had posted awhile ago about a different acquistion that conveyed Intel could have been dictating their corporate strategy to the acquired company - I assumed this because the press release contained an Intel-based strategy that was long-term good, but for anyone with some industry knowledge, they probably would have felt the language could have had some small potential to threaten the acquired company's immediate customer base. (This was the post where I asked why Intel was competing with their customer base). So, from this press release, I started to develop the impression (possibly incorrectly) that Intel may have a tight corporate leash - Intel seems interested in acquisitions, more from the standpoint of organically building Intel components for the long-term, than enabling the acquired company to focus on immediate, product revenue gain. As a shareholder, I'd have to concur with this method to the extent that the long-term molds correctly into Intel's strategic plans. My assumptions may be wrong, but I doubt Intel's current culture would fit a big player that wants to operate independently. So, a 'timid acquisition' (as you called it), could be the right approach. And as long as Intel can hustle if it needs to, we should be okay. Regards, Amy J