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

To: Paul Engel who wrote (124751)	1/12/2001 8:38:18 AM
From: Dan3	Read Replies (2) \| Respond to of 186894

Re: cut our number to 5.5 million I'll bet you an "I told you so" that AMD does better than 5.5 million CPUs this quarter. Inventory overhang or not, the cost of platforms supporting the modestly priced, high volume, high performance, Duron have dropped to about half of what they were 6 months ago. What was a $110 motherboard w/sound + $35 video card + $15 modem + $15 more expensive case/PS is now a $75 integrated motherboard. Duron is also universally regarded as a significantly better processor than Celeron, clock for clock, ships at higher clock speeds, and is getting much higher visibility this quarter. Athlon has not gained nearly as much from infrastructure changes, but does get the "free" addition of DDR and 266FSB for this quarter. Case/PS costs have come down a little, as well. Intel's high nominal MHZ P4 has its obvious marketing advantage, but between die size and the necessary Rambus rebates, the cost disadvantage faced by P4 is staggering. P4 also has higher motherboard costs - though that cost differential is dwarfed by the die cost disadvantage and rambus disadvantage. With each P4 it ships, Intel includes a rambus rebate check that is equal to AMD's cost of production of 2 Athlons. On top of that, each P4 costs about 4 times as much to produce as each Athlon. Athlon outperforms P4 on the vast majority of software, including almost 100% of productivity applications. Nonetheless, high nominal megahertz and the Intel name are a powerful combination, so I expect it will be a tough battle for the upper midrange and high end desktop space. But Intel is going to have to forgo almost any profit in what was once its most profitable sector if it wants to keep AMD from walking away with that market. With the sudden increase in competition at the low end and reduced server demand as the dot-coms implode, Intel is going to have to cede more than 5.5 million sales to AMD unless it prices its products to give itself a $3 Billion loss for Q1. Are you expecting Intel to lose $3 Billion this quarter? :-) Dan