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

To: Mary Cluney who wrote (138982)	7/10/2001 12:43:36 PM
From: Dan3	Read Replies (1) \| Respond to of 186894

Re: The Alpha Server and 31 add on CPU with related 32 MEM Module and MEM DIM UP comes out to about $2,347,800.00. When Compaq ends the Alpha manufacturing and replace this with the Itanium, does this mean that a lot of this revenue goes to Intel? 32 CPUs might go for as much as $128K - though Compaq would probably get a better price than $4,000 each. Intel doesn't make memory so their revenues are limited to CPU, chipset (if it isn't from serverworks), motherboard (unless compaq makes their own - which they have in the past) and not much else. So, under your assumption that the "server market" numbers we've seen exclude everything but the hardware (and I'd still argue the point vigorously) Intel gets 3% to 5% of the revenue. Even 5% of $15 Billion ($60 Billion Annual) quarterly high end server sales is only $750 million. If Intel and IBM (S/360, AS400, RS6000) each get 40% of that and SUN gets 20%, it yields $300 million gross revenue for Intel. Double that number and it still isn't going to be a big deal for Intel. Now subtract out Intel's costs of keeping all those OEMs happy and producing the chips, compilers, etc and calculate what those sales are going to add to the bottom line. There is a reason that Intel bought the remnants for DEC from Compaq rather than DEC buying the remnants of Intel - it wasn't just horrible mis-managment on the part of DEC. Hardware in that segment is dying as a source of profits.

To: Mary Cluney who wrote (138982)	7/10/2001 12:58:49 PM
From: Tony Viola	Read Replies (1) \| Respond to of 186894

Mary, >When Compaq ends the Alpha manufacturing and replace this with the Itanium, does this mean that a lot of this revenue goes to Intel? Is that a tongue-in-cheek question? Alpha has another couple of speed bumps (I think a couple) planned by Compaq, and then it's all Itanium, which means the revenue for the Compaq GS series CPUs goes to Intel. Same thing with the NSK, aka Himalaya, aka non-stop Compaq computers that the stock exchanges, etc., use. Couple more MIPs iterations on the NSKs (not sure exactly of the couple) and then they all go Itanium. An aside: when CNBC shows their updating NAZ, DOW and individual stock quotes on the screen, will there be an intel inside ™ logo there along with? BTW, figuring cost per chip for Itanium, I'd use $4,000 for industry standard servers, just for WAGs, but when they're used in servers like GS and NSK, I'd bet they'll be more because of higher RAS and other super high end CPU chip requirements. Just a guess. That might also apply, again just guessing, when HP cuts over to McKinley for their Superdome line. Interesting negotiations to be happening between the OEMs and Intel in the pricing area. The OEMs bargaining chip is "we moved to Itanium partly because of standard high volume cost savings". Intel comes back with "yeah, but you were paying 3X that (WAG) before for all those other RAS requirements. Tony