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

To: Amy J who wrote (137857)	6/21/2001 7:53:39 AM
From: Road Walker	Respond to of 186894

Amy, re: What if the customer cancels/returns product back to the disty? Would that be counted on Intel's books as revenue and then counted as a return liability? It depends on the deal Intel has with it's distributors, who takes the liability for returned products to the distributor. My WAG is that once the distributor sells the product, it's his problem if it gets returned. If it were a large order and Intel could help out, that might be negotiated. Again WAG. re: Would that depend upon cancellation or return policies for the end-user to OEM to chip company? Speculating with a little more confidence. I've never seen an agreement where an OEM could return a component that has already been used, installed in a product. Intel may have agreements where an OEM can do what is called inventory balancing, if Dell orders too many 1.3 GHz and not enough 1.7 GHz, they may let them make an exchange. The fact that Intel recognizes revenue when the OEM takes possession of the product suggests that they don't have a liberal OEM return policy. If an OEM gets itself into inventory trouble, Intel might help them out, as an exception and to maintain good customer relations. It's always a good thing to have your customer owe you a favor. John