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

To: Paul Engel who wrote (40912)	11/24/1997 8:05:00 AM
From: Kealoha	Respond to of 186894

Paul: from Red Herring on WINTEL 4. THE WINTEL DUOPOLY BEGINS TO SHOW CRACKS. By Luc Hatlestad Last October Intel backed a proposal for digital cable-TV software advanced by Microsoft's rivals Network Computer (the Oracle-owned developer of NC software) and Netscape Communications. In doing so, Intel broke ranks with Microsoft, which is developing its own set-top box software based on Windows CE and WebTV. Is the world coming to an end? Don't get too excited. Microsoft and Intel are still Siamese twins, and they'll continue to rule the world of personal computing well into the next millennium. But Microsoft wants to sell software for platforms that--like Windows CE and WebTV, for instance--don't use Intel's chips.What's happening? The slowdown in PC sales. The saturation of the enterprise and home PC markets has motivated Microsoft to look elsewhere for growth. The growth of the Internet. Microsoft hopes to find the profit margins it formerly enjoyed from PC sales in a combination of Internet markets. The company has invested in everything from Net TV to online content development and licensing. The rise of nonstandard devices. The increased demand for "smart chips" that will power a new category of Internet-connected devices like set-top boxes, smart cell phones, pagers, and personal digital assistants has opened the door for companies like Advanced RISC Machines, IBM, and any number of 3D graphics chip makers to partner with Microsoft. To be sure, Intel has enough money and fabrication plants to adjust to the market (it has already begun developing alternatives to the Pentium), but it is a new challenge. Internet computing is about more than selling new PCs, the basis of Intel and Microsoft's traditional business. So long as the Internet's platforms are using some variety of Windows, Microsoft has the will and the money to overhaul its operations (of course, whether or not Windows will be the dominant platform for this new era is another issue: see Trend No. 5). But Intel has not had to reinvent itself since it shifted from memory to microprocessor production in the '80s. With all these new factors coming into play, 1998 could be the year we begin to see Wintel, version 2.0.