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

To: Kushi Kullar who wrote (137647)	6/19/2001 9:29:41 PM
From: Road Walker	Read Replies (1) \| Respond to of 186894

Kushi, re: "stuffing the channel" The only way to have customers take on extra inventory is to offer incentives. First you offer extended payment terms, so that although the accounts take the product into inventory, they don't have to pay for it for an extra 30 or 60 days. Then you offer a volume discount, if the product ships before a certain date. The qualifier for the discount might be 30% more than an account average monthly orders. Most companies recognize revenue when the product is shipped, so it goes into the present quarter, even though the payment is delayed. I'm not sure what Intel's policy is on revenue recognition. It makes the books look much better, with lower inventory and higher revenue; temporarily. You can look for an unusual spike in receivables as a percentage of revenue to get a clue if this is what a company is up to. I don't believe Intel is stuffing the channel. They are too conservative, a bunch of engineers that wouldn't take to that kind of deception. Besides, they said they wern't doing it. I like the odds of Intel's integrity over Osha's speculation. John

To: Kushi Kullar who wrote (137647)	6/19/2001 9:51:46 PM
From: AK2004	Read Replies (1) \| Respond to of 186894

Kushi John already has described the most likely approach that can be used. There are also other ways of doing it by creating supply imbalance etc... Intel used the "StrongArm" <ggg> technique in the past to force on some practice. Business is business and companies do what they can get away with. Regards -Albert

To: Kushi Kullar who wrote (137647)	6/19/2001 10:08:11 PM
From: Windsock	Read Replies (1) \| Respond to of 186894

Kushi - Re:"Is'nt most of the demand "just in time" these days?" You are absolutely correct. So you can't "stuff the channel" by shipping to Oem's. You also can't stuff the disti channel because Intel places the sales to disti's on a Current liability line -- Deferred on shipments to distributors -- until the product is actually sold to customers. The concept that Intel "stuffs the channels" demonstrates the ignorance of Osha. He doesn't know how the industry he analyzes works.