Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Tenchusatsu who wrote (137250)	6/12/2001 7:49:58 PM
From: Road Walker	Read Replies (1) \| Respond to of 186894

Ten, re: Of course, the bleeding edge of today becomes the mainstream of tomorrow. But nowadays, the drive in demand is no longer from the top, but more from the bottom of the performance curve. The price of the high end has been coming down steadily for years. The price of the low end was going down as well, but in the last year and one half, it's actually increased. The current situation dictates what is considered high end. Because we are at the low point in the cycle, Intel has the luxury (albeit not a particularly attractive luxury) of driving the P4 into the mainstream very quickly. All the previous new generation processor were sold as very high end items, can't do that with P4 for several reasons. One is initial performance, the other is the idle capacity at Intel. The vast majority of the demand was always from the bottom of the performance curve, demand has NEVER been driven from the top. The difference now is that that with Intel P4 ample supply and low demand you can't get top dollar for the very high end, leading to lower ASP's and GM in that segment. Don't get me wrong, the marketplace is maturing. But the same upgrade cycle still applies. The early adapters that buy the latest processor are still there, they just don't produce as much revenue. In April, May and June of 2000, the PC industry was setting records for YOY sales. What happens after that, sales naturally drop off. When the market for PC's stinks, as it does now, it's easy to say there has been a structural change in the demand profile. But that can be a grave error from a strategic point of view. Judging by the Intel capex, I don't think Intel upper management is making that error. John