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

To: Noel who wrote (141095)	8/8/2001 8:47:08 PM
From: pgerassi	Respond to of 186894

Dear Noel: They have done such stupid moves in the past! Ignoring the FDIV bug is one prime example! Going all Rambus for P4 is another! Forcing Rambus down the market's throat seriously hurt their chipset market share! Intel used to make $2 to $3 billion a quarter! From an external viewpoint, their acquisition strategy is a complete disaster! They are losing almost as much as revenue (other costs are twice that of other revenue in the last quarter). This trend has continued for the past year (or more). There are two possibilities for this, first that the numbers really belong to other or second that IAG costs are sent to other for some purpose (probably to boost IAG profit). The first shows that in the aggregate, Intel's acquisitions lose money in buckets. It would be prudent for Intel to either close or spin off these profit drains until a core of operationally profitable divisions remain. The second shows a convenient place to stuff extra costs related to IAG from showing the shrinkage of IAG profitability. This second possibility demeans Intel's creditability and reputation as well as defrauding its shareholders. There probably is enough wiggle room to prevent criminal liability but, ethically it is wrong! In either case, Intel's management is in question. The first shows that Intel's acquisition policies have failed and should be curtailed (I do not remember any shareholder votes to continue the acquisition policies directly). The second is far more damaging than the first. This points to Intel misleading investors one way or the other. That could lead to civil or criminal lawsuits. Could they get out of it? Yes they could but, there would be policies against any such practices in the future. A shakeup would probably be necessary and much more open and detailed reporting would be done to rebuild confidence. They may not be able to avoid losses, if they are not willing to give up share. To have a price war, you need at least two parties hell bent on gaining unit share. Now we could debate, if a price war is in AMD's interests LT as long as they gain share. I can see both points of view. I am debating if it is truly in Intel's interests LT to have a price war to maintain share. I see far more reasons for Intel to be better off, if it stops, than if it continues. The biggest reason is that AMD is capacity constrained over the next few years. They could move over to P4 by raising P3 prices instead of lowering P4 prices. They might actually make more money that way ST. AMD would probably respond by increasing their prices as well. Yes, it benefits both companies, but Intel with larger volumes, benefits more. When the market finally starts to expand, then Intel will gain even more because of the increased ability to supply. They should take the gains and put it into additional R&D to come up with a better CPU and compete using technical and marketing superiority rather than price. That way it is a win for the consumers, a win for Intel, and yes, a win for AMD. P4 has too long a pipe, and IA-64 is too complicated to program for. They need a better solution. They would have time to find one. Pete

To: Noel who wrote (141095)	8/8/2001 9:12:32 PM
From: wanna_bmw	Read Replies (1) \| Respond to of 186894

Noel, if Pete really does believe what he says, then he must also believe that Andy Bryant and Paul Otellini have intentionally set up investors for a huge disappointment, given their earnings guidance for this quarter. I believe their numbers were $6.2 to $6.8 billion in revenues. If we assume similar operating costs and expenses from last quarter, which was $6.1 billion, then Pete's $100 million loss would put revenue at $6.0 billion for the third quarter. I suppose that situation would be a dream for those looking to short on the stock, but unrealistic if you look at Intel's past history of sticking to their guidance. wanna_bmw