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

To: greg s who wrote (176568)	1/19/2004 4:41:55 AM
From: Amy J	Respond to of 186894

Greg, RE: Intel entering consumer market I think Mattell missed a consumer shift. And that's the problem with the consumer market. It can shift on you in a dime. It's not like the PC market, where the decision maker is an IT person, with pilot studies followed by revenue streams for 3 years. The rules are straight forward in business hightech - faster, cheaper, better (mobility, features). But the consumer market is not like this. The rules are different. What are these rules? Do we, as investors, know them? Are we comfortable with this shift? The consumer market is more fickle and can change on you in a dime, faster than your development team can respond. That's the risk in entering the home consumer market. Does your revenue stream get based upon, "what home consumer product is popular this season?" If so, then the wrong consumer bet, and you've missed the season. Let's look at your example: in the Barbie product line, Mattell was losing opportunity revenue to a nascent competitor that makes an innovative line of dolls (wholesome, smart dolls) - these higher margin dolls are popular in the Bay Area and beyond. Consumers can change their buying habits with nothing more than a fancy whim. Do we want Intel to head in this direction? I'd be inclined to say yes, to grow revenue and fill fabs, as a source to those consumer product-lines that have a long life, preferably a decade long so an investment is recouped, certainly longer than one season. Does Intel have someone on its board, for this corporate entry into the consumer market? This is who I think they may have on the Board, off the top of my head: They have a biotech executive. Biotech is a needed emerging area. They have a Solectron exec. Need to keep up on mfg. They have someone who goes way back. Need to keep the institutional memory. Grove is a board member and I think Les Vadesz might be too - I think they are needed to drive Intel into providing chips for new innovative business technologies, like say nanotechnology. Based upon their reputations, I tend to think the type of stuff they find would be key to moving Intel upstream into smarterland (innovative technology, higher margins, chips for high volume business products, and far away from the fickle land of consumer beer commercials). New technology for businesses feels similar to Intel's tried and true formula. Barrett - we obviously need his fab manufacturing insight. Probably was the fabs that saved Intel during this downturn. ( But he really needs to take the initiative to get more women in science as professors tend to fund guy-based research (car performance rather than car safety) which works to keep women uninterested in the PhD engineering programs, so need more representation in the industry here that only the industry can drive. ) Otellini - seems like the only one with a more marketing background on the board, and what a stunning win with Centrino. But where are the < 2lb Centrinos for women? They have an Auto exec. He may be Intel's only board member that sells into the consumer space. Autos are suddenly getting more and more gadgetry inside of them, if the new design brochures are any indicators - auto is an important area. This member probably can also dual as a representative for the male consumer as Intel enters the consumer market. But what's lacking on the Board is a home consumer exec and a representative for the female consumer. I think Intel needs to have a perspective of both eyes for the consumer market. If Intel plans on entering this market, in order to reduce risk, I think they could add such a member to fix this. Things can suddenly turn in the consumer market - due to an ever changing consumer. Mattell might be an example of how a consumer mood can change on a whim. If not this example, there are plenty of other examples you probably can recall. It's possible, the whimsical nature of consumers, could speak to a need for a special rotating annual board seat - where this seat is filled with an industry consumer leader on a key consumer industry area for that particular year, in order to provide board level oversight around the company's strategic decisions in the home consumer market. This of course assumes Intel intends to enter the home consumer market beyond just one product line. I certainly hope Gates intends to micromanage Xbox's expansion into the home, as is rumored, particularly with Microsoft's Ed Fries departure. And possibly Carly can help provide color to the industry. Regards, Amy J