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

To: dale_laroy who wrote (135562)	5/20/2001 1:52:07 PM
From: tcmay	Read Replies (1) \| Respond to of 186894

Granularity of "bets" Dale La Roy writes: "The introduction of the PC was hardly an example of betting the company, but the subsequent move to MicroChannel was." I disagree. Betting wrongly on Microchannel did not damage them as badly as a true "bet the company" situation would imply. Giving control of the operating system to Microsoft was a more damaging move for IBM to have made, with longer-lasting implications. "Actually, the third bet was moving to a radically different cell design for the 64Kbit generation of DRAM (along with the all the rest of the manufacturers, with the exception of the Japanese). By sticking with a shrink of tried and true cell designs for the 64Kbit generation, the Japanese took a commanding lead in DRAM." Your definition of what a "bet the company" bet is, and mine, are quite different. Intel had a credible 256K DRAM and even a 1 meg DRAM which they showed to IBM and Siemens in the mid-80s. (Both were said to be highly impressed.) They could have stayed in the DRAM market but the pricing was cut-throat. I don't believe the success or the failure of the 2164 and its various steppings would have changed this cut-throat environment significantly. Look at the problems Japan has been having for the past decade. I expect the Japanese DRAM manufacturers who were riding high in 1980-85 would have much preferred taking the route Intel took. "The fourth bet was obviously the 386. Intel neglected their 286 market while focusing on the 386, enabling the likes of AMD and Harris Semiconductors to take over the 286 market." Evolutionary, not a "bet the company" in the sense described here. "The fourth bet is Itanium." Quite probably this is one of those bets. (At least I was planning to cite it as the Third Bet.) "The fifth bet was the communications market." Possibly. But, so far, Intel has only dipped its foot in the water. Which could turn into a "bad bet" if the market is very large and Intel misses it completely. A more canonical example of a major bet in this arena would be a major merger with an existing telecom or optical company, e.g., merging with Cisco or Broadcom or JDSU or acquiring several medium-sized optical companies. Then the consequences of success or failure would be huge, which means it's a "bet the company" situation. "And the sixth bet was Rambus. " Not a chance. This was just a screwup, in retrospect. Like IBM's Microchannel. Not even as big a screwup, in retrospect, as the 432. (I refer to the 432 as a screwup not to be disrespectful of the ideas and efforts, but just to make the obvious point. No offense to 432 designers is intended...it's just one of those screwups that most companies have.) You believe there have been 6 "bet the company" situations for Intel. Clearly your granularity is different from mine. And, in any case, I don't even agree that some of the bets you cite were as important as other decisions and screwups. --Tim May