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

To: Mary Cluney who wrote (134573)	5/10/2001 5:17:56 PM
From: Road Walker	Read Replies (2) \| Respond to of 186894

Mary, re: Intel communications division / Barrett Good measured and balanced response. I think we agree more than we disagree. But the thing I'm not sure of, is if most Intel investors realize the impact of the losses in Intel's "other businesses". I don't think it's a "harsh metric" for an investor to use earnings or losses as a performance measure, as it relates to current stock price. The communications division, as it currently stands, is a disaster. From the analyst's meeting, they appear to have some design wins that could produce significant revenue when and if we see a pick up in communications infrastructure spending. Not sure about profits. The NT's, LU's and Cisco's, those with extensive experience in the marketplace, are not willing to make firm predictions. With "other businesses", Intel's operating earnings per share Q1 were less than $.10. IAG's operating earnings per share Q1 were over $.25. I'm not sure what the pro forma earnings would have been without communications, but it's a good bet they would have be at least double the $.16 they reported. Intel is not a company that has had a recent history of success outside of the microprocessor business. Maybe the communications adventure will work, Intel will set the standard, and the shareholders will be richly rewarded. Maybe it won't, and we will be faced with the ugly prospect of an very costly exit strategy. I guess the point that I think is important for investors to understand is that the communications division is at least as important, probably more important, than IAG to Intel's valuation today, and going forward. I don't know if Intel stock price would be 25% or 50% or 100% higher without the "other businesses", I do know it's a very significant amount. Mr. Barrett is placing a huge bet on Intel's ability in the communications marketplace, with shareholder equity. IMHO the fundamental risk in owning Intel is much higher today than it was two years ago. John

To: Mary Cluney who wrote (134573)	5/17/2001 9:38:53 AM
From: Amy J	Read Replies (2) \| Respond to of 186894

Hi Mary, RE: "It some thing that is much more subtle and much more nuanced - something that engineers are not trained to see." A CEO doesn't have to be a marketer, but he or she needs to have the skillset to know who to trust on areas they may not be trained in, like protecting the brand which is a marketer's job. Barrett's an excellent CEO - he has the ability to go after new markets and was instrumental in turning things around in the 80's for Intel - I understand he studied Japanese companies with an intensity in order to determine how Intel could be competitive with them, meanwhile, American auto companies were getting slaughtered with their passiveness. So, in the big picture of things, Barrett is an excellent CEO because he realizes that taking risk - even with a big company - is better than passivity. But protecting the brand is important too and having executives underneath them that protect it is key. The source of Itanium's early perception problems is due to the media blitz (published interviews) on Itanium in 1997 that eventually resulted in hurting Intel's brand. The engineering issues weren't really any different than other comparable products in the industry, but the media blitz generated an exciting buzz in the industry and as any good marketer knows, a poorly timed blitz turns into poison that is destructive to the brand. Marketing owns protecting the brand and timing - and that means resisting pressures to blitz before a launch. Maybe it even means reigning things in, quieting things down, or embargo'ing until product is commercially available. Some of the best early phase enterprise marketing is done quietly, behind the scenes at large customers, in a reliable, non-hype fashion. Blitzing before solid launch is taboo. As you once said, it's all about managing the soft stuff. Regards, Amy J