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

To: Dan3 who wrote (149238)	11/23/2001 1:28:43 PM
From: Dave	Read Replies (3) \| Respond to of 186894

Dan, Let me put it another way; AMD needs to differentiate its product offering from Intel. AMD cannot continue to fight these price battles with Intel. Therefore, if AMD did differentiate its product line, such as the Media Gx, both AMD and Intel could co-exist. My main belief is this, consumers do not care whether, or not, their uP was made utilizing SOI or Cu processes. Consumers want the "mostest" for the "leastest", i.e. exceptional value for their money. While you talk about the IA-64, I recall arguments when Intel came out with the Pentium Pro (remember that processor) and how it was slower than a Pentium MMx and that it utilized a different architecture. While everyone talks about "upgradablity", few users truly "upgrade" their computers. Instead of "upgrading" users go out and purchase a new computer. Now, as to the IA-64, I do not believe that Intel is abandoning their "installed base". Over time, their are modifications done to the bus architecture, for example, the differences between the x86 line of chips. If you have one, try plugging a 386 uP into a 486 MB. It simply does not work. Same goes for the 486 to Pentium. Pentium to Pentium MMx (ok, so it needs two voltages). Pentium, or Pentium MMx, to either the Pentium Pro (or Pentium 2). Intel has always, in your words, abandoned the "older" architecture and substituted a "better" architecture in place of it. The IA-64 line of uP represents Intel trying to leverage their dominance in the uP and making an attempt to attack the UNIX market. Therefore, they are walking into the territories of both Sun and IBM. Of course it is a risk. However, AMD is also busy designing a 64 bit uP. On the other hand, AMD has to develop its own bus architectures once Intel announced the Pentium 2 line of chips. Is AMD going to utilize the Athlon bus architecture for the 64 bit line of uPs? Since AMD's corporate overhead and general cost structure is lower than Intel's, AMD will most likely be making greater profits than Intel within 2 years, while spreading those profits over only 316 million shares. You are arguing costs, however Intel sells more uPs than AMD. Additionally, both companies are facing GM pressures, however AMD must find ways to raise their GMs. Dan, I know I sound like a broken record, but instead of focusing on Intel and how they have (or will) dropped (or drop) the ball, I would take a long and hard look at AMD's capital structure and realize that AMD needs Intel to be successful. If Intel is successful, AMD could be successful. If Intel is not successful for a while, AMD may no longer be an investment option. AMD cannot be a successful company if they continue to attack Intel head to head. Instead, AMD must develop a novel strategy (not focusing on the low end) and differentiate their uP offerings from Intels. While the Media Gx failed, if AMD (or even Intel) could come up with an excellent "all-in-one" uP, that company will be wildly successful in low to mid range computers. While the ASPs might be low, it could be profitable due to little, or no, competition. Maybe even add code morphing from Transmeta allowing the chip to be "flashed" (although I do not know much about TMTA and their technology), hence letting user's upgrade cheaply. And with the SW upgrades, every year or two, work on HW upgrades for the chip, expanding its memory capacity, etc. In conclusion, I believe AMD will always be a "me too" company and will never be able to take out Intel; AMD also may not be around, which I would not like to see. AMD could survive by differentiating their product offerings from Intel and attack the market with a novel, unique chip.