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

To: Mary Cluney who wrote (137318)	6/13/2001 1:38:19 PM
From: tcmay	Read Replies (2) \| Respond to of 186894

"This "visibility issue" has to be a smoke screen. If it is true that these companies cannot project sales three months out, they should reconsider their marketing budgets. They are not getting what they are paying for. It should be a lot less complex and more accurate than sampling 500 likely voters to determine how they are likely to vote in a Presidential election. " I disagree, because of order cancellations and double-bookings. During the recent boom times, customers ordered things they weren't sure they could sell, and they often double-ordered. When the bubble popped, massive cancellations. (I applaud AMD, by the way, for pursuing a suit against Alcatel for ordered a huge pile of chips and then cancelling. Orders are contracts, and contracts should be enforceable. While it may not always be wise to sue potential customers, this business of customers thinking they can place orders and then cancel them willy-nilly has got to be dealt with.) "Intel should stop spending so much money running those cute little ads with the funny looking men painted in blue, and spend it on some real marketing people and forecasting tools." I expect they have very good people in these jobs. When Cisco's sales go to near-zero in Jan-March, forecasts made in December are not of much use. (If your point is that Intel should have known about Dell's or Cisco's business, no comment. If they could do this they would then be better off getting rid of all manufacturing and just operating as a hedge fund.) --TIm May

To: Mary Cluney who wrote (137318)	6/18/2001 10:02:15 AM
From: Amy J	Read Replies (2) \| Respond to of 186894

Hi Mary, RE: "It's not like they wake up one morning and decide how much they spend on technology the following week." Generally speaking, it sort of seemed like that's what happened last year in the industry. RE: "Intel should stop spending so much money running those cute little ads with the funny looking men painted in blue" I heard the ads are incredibly popular overseas, though I prefer warmer ads. RE: "spend it on some real marketing people and forecasting tools." We had one chip company stop by and ask us how many chips we'll be buying. It was a bit creepy to realize that their forecasts could be based upon a bottoms-up count of what all their buyers claim them to be. A bit of the blind leading the blind? Regarding your comment about IBM and capex, generally speaking, if there's a sudden IT/capex cut, that could change a forecast on a dime. Then there's the double-bookings that build up inventory. That creates havoc in the industry too. Try being a good citizen, plan your orders, and not over/double-book and you can get slammed - limited chips limits revenue. And in some cases the distys don't help these types of industry problems because their allocation procedures seem somewhat questionable at times. For example, how do you explain an incredibly long lead-time on a b/o part that suddenly shrinks exactly the same moment you happen to put in a larger order with a disty? Coincidence? Or, a disty's allocation system possibly based on order-size, not FIFO? (I may be beginning to understand why firms double-book and the incentive to do so.) The stories get even worse. How about a disty that tells you, "if you say <abc - some bizarre comment unrelated to the biz>, then I'll get you all the parts you want." Boy, that rather random comment sure lends a vote of confidence and trust in a disty's so-called allocation system. And this, from supposedly one of the most reputable distys in the industry. Allocation systems (by some certain distys, not the mfg) are beginning to sound like they may be corrupt, sleazy, and dishonest. Though there are some distys that have been very squeaky clean, there are others that give the impression that the disty business isn't particularly clean at times. One time I received a random cold-call out of the blue from an "Intel representative." To ensure it was an Intel employee and to distinguish the caller from a mfg's rep (which is an outside rep), I specifically asked the caller if they were an employee with Intel and which group they worked in at Intel, and the person said "I work in the --- group of Intel with xyz." So, I let the person visit us the next week. But the person's introduction of their position seemed noticeably evasive to me, so I poked. Turns out the person wasn't from Intel but appeared to claim to be, in order to get their foot in the door. And guess whose foot? Intel's overseas competitor (a competitor according to a fellow SI poster, that I had never head of before). This person was not an Intel employee as they had originally lead me to believe. I back-tracked to find the source of how this person even discovered us. The person claimed they received our name from a person at Intel (which I knew wasn't true.) With more poking, I discovered it was a highly reputable Intel disty that gave our name to a mfg rep, yet this so-called "Intel rep" talked about Intel's competitor, not Intel. I dug deeper to find out how the person would be paid if product is bought from them - surely they must get paid commission for their "sales efforts." (We're not under NDA). The mfg pays the mfg rep a "cut" based upon disty sales, and this is regardless if the account was in place prior to the appearance of the mfg rep. I didn't like how the disty gave our name to someone that misrepresented themself, so I called the disty on it. Unfortunately, that negatively impacted the relationship, and given that a disty has the power to cut your supply off, the direct method was definitely not a wise way to handle the matter and probably the biggest business mistake I could ever make. What would be really great is a 1-800# to anonymously call to report the occasional bizarre disty behavior (1-800-bad-disty) to the legal department of the manufacturers, (not sales/marketing departments where bonuses could possibly be tied to disty sales volumes.) AMD seems to be classier in their aggressive methods (than the overseas company's mfg rep) - at least they don't misrepresent themselves. One-time, out of the blue, back when we were deep in stealth mode, I received a fax from the Dir of Sales at AMD to solicit our business. It turns out a disty that I had called, had leaked my fax number to AMD without my permission. I was rather glad I didn't give out any information to the disty other than my fax number. Building accurate forecasts is based upon more than knowledge and tools, it's also based upon trusting forecast information too from customers, which includes the distys (approx 33% of the chip business if I recall the market reports correctly?). Cut out any potential corruption that generates a situation of double-bookings, and create a FIFO allocation system, and the forecasts would get better, though this still would not completely fix the problem since demand can change on a dime. Regards, Amy J

To: Mary Cluney who wrote (137318)	6/18/2001 5:55:57 PM
From: Road Walker	Read Replies (1) \| Respond to of 186894

Intel CEO delays expansion due to economic woes By Steven Scheer JERUSALEM, June 18 (Reuters) - Intel Corp (NasdaqNM:INTC - news) chief executive Craig Barrett said on Monday that a deceleration in the global computer industry had put off a decision on whether to build a new chip plant in Israel. ``We have not made a decision to go forward for economic reasons,'' Barrett told reporters in Jerusalem. ``There is a slowdown in the industry and that's tempered the need for expansion. But we are still evaluating our options.'' Intel, the world's largest chip maker, said earlier this year it was considering building a new $3.5 billion chip plant next to its current facility in the southern city of Kiryat Gat and the Israeli government had said it would provide Intel with a grant to help finance the plant. But on Monday Barrett said: ``It's a difficult time in the high-tech industry and the computer industry is decelerating... We think there will be a recovery by the end of the year but no one knows for sure.'' He said that the soon-to-be-released XP operating system from Microsoft (NasdaqNM:MSFT - news) could help revive computer sales. ``It may give a boost in the second half of the year,'' Barrett said, adding that whenever Microsoft released a new product with an advertising blitz, ``it has the possibility of boosting the industry''. Barrett said consolidation in the computer industry would continue, with middle-tier companies suffering the most. ``It appears that top multi-nationals are gaining market share at the expense of smaller brands,'' he said. ``The mid-tier multi-nationals, such as Micron, are seeing a decline while Compaq, Dell and Hewlett Packard are gaining market share overall.'' The global slowdown has hurt Intel, which last week reiterated that sales in the second quarter would be at the low end of expectations of $6.2 billion to $6.8 billion, a decline of as much as 25 percent from $8.3 billion a year earlier. INTEL CUTS IT LOSSES Barrett said the company was still on track to reduce its head count -- mainly through attrition -- by 5,000 people by the year end. ``Until the economy picks up, it would be prudent to keep control of our expenses,'' he said. Citing a ``quiet period'' ahead of its second quarter results on July 17, Barrett declined to discuss the company's near-term outlook. But he said Intel was armed with $7.5 billion to invest in new companies and technologies and was still looking for acquisitions. ``We are still looking to enhance our offerings and invest in networking and communications companies,'' Barret said. Intel plans to invest in next generation processors and move from eight-inch to 12-inch wafers, he added. ``The way to emerge from a recession is with new products,'' Barrett said. ``I look to the future of high-tech and I have to be positive about it.'' He pointed to the Internet as a good example. ``There will be one billion users in a few years,'' he said, adding that Internet usage in Latin America, Eastern Europe, Africa and Asia was still low. Barrett said that while it was difficult to predict the next big growth area, it would likely be in the upgrade and improvement of Internet architecture -- one of Intel's main strategies. Intel's Israel plant, which manufactures the Pentium IV and 150 other chips, exported more than $2 billion of orders in 2000. Barrett said Israel was still in with a good shot at a new plant if expansion returned to the agenda. Israel was attractive because of its strong background in engineering and technology. He said Intel was looking at other sites, and would evaluate a range of conditions -- financial and political -- but he said the current instability between Israel and the Palestinians was not troublesome. ``This is a long-term investment,'' he said. ``We don't get bothered by short-term issues.''