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

To: Amy J who wrote (145692)	10/19/2001 1:22:58 PM
From: Proud_Infidel	Respond to of 186894

Intel To Shutter Consumer Electronics Businesses By Daniel F. DeLong, www.NewsFactor.com Facing significantly lower sales and earnings, giant chipmaker Intel (Nasdaq: INTC - news) revealed Thursday that it is cutting back on all manufacturing activity, including shutting down its consumer electronics division. Called the Connected Products Division, the unit specialized in digital cameras, digital-audio players and toys -- a market in which profitability has proved elusive. The Santa Clara, California-based company says the unprofitable division will close sometime in the first quarter of 2002, while it continues to concentrate on its core chip business. "It [the division] simply wasn't meeting projected revenue targets, with little hope of short-term improvement," company spokesman Chuck Mulloy told NewsFactor Network. Concentrating on Chips Mulloy said the firm will concentrate more on the production of its chips, including the Pentium III and Pentium 4 microprocessors. In the past four months, Intel has moved to open plants in Asia and to expand domestic operations. On Wednesday, the company opened a US$2 billion plant in Chandler, Arizona. It is the firm's first chip plant -- called Fab 22 -- to use 0.13 micron process technology where line widths on the chips are 0.13 microns across, or less than the width of a human hair. Small Chips The company's decision to get out of the consumer business did not surprise analysts. "Intel simply realized this area wasn't going to produce bottom-line results for a long time to come," Joseph Osha, an analyst at Merrill Lynch, told NewsFactor. "In the current environment, it makes more sense to stick with the core product," Osha said. Viewed Positively Douglas K. Lee, of Banc of America Securities, told NewsFactor that Intel's decision is being viewed positively by his company. "Investors want companies to concentrate on what they do best," he said. Intel also said it will drop earlier plans to introduce a Web Tablet Internet accessory, which it showed off last January at the Consumer Electronics Show. And in August, Intel stopped making its Rex personal organizer device. Last February, Intel closed Intel Media Services, which was started to host streaming video events, and also dropped its Intel Online Services unit. Possible Profit Disruption Nearly all technology companies have been rocked in the past year, pushing manufacturing well into recessionary levels. Intel said on Thursday that it has begun issuing a blunt warning in fine print on all press releases, hoping to ward off lawsuits. The warning says, "Terror attacks may choke off profit growth." The company said a "possible disruption in commercial activities occasioned by terrorist activity and armed conflict" could impact its sales and profits. Class-Action Suits High-tech companies have been susceptible to class-action lawsuits, and the warning of terrorism activities is viewed as simply another way that firms can protect themselves. Apple Computer (Nasdaq: AAPL - news) has also opted for adding the warning at the bottom of its news releases. The two firms instituted the warnings because both have had suits brought against them since the September 11th terrorist attacks.