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

To: Charles Skeen who wrote (41876)	12/10/1997 10:51:00 AM
From: gnuman	Read Replies (2) \| Respond to of 186894

Paul E, Some questions regarding the future of the PC market. I'm going to constrain these questions to the PC market as we know it now, since the market for some of the proposed new applications for CPU's are conjecture at this point, ie; Set-top PC's, thin clients, etc. If we look at the business market, a number of reliable sources, ie; IDC, have shown that the market is saturated. If I remember correctly, 1.1 PC's per desk-worker in the US, and 1 PC per desk-worker globally. The conclusion is that the corporate market is largely replacements. If we assume the largest market for upgrades are the more archaic machines, (P54C and X86), the questions are, "what will be the mix between low cost P55C and PII? How price sensitive is this market and what does PII offer the average user that the P55C doesn't? Will Intel reposition slot 1 to compete directly with socket 7, and if so what is the impact on margins?" (Note that it is anticipated that P55C/233 will be in the $100 range next year). As for the home PC market, IDC and other sources show there has been little increase in penetration over the past few years. (Approx 31% in 1993, 35% in 1996). I'll grant you that these figures do not reflect the replacement market in the home, which is probably significant since these users are in the higher income brackets. But the consensus is that suppliers are now focusing on new users, and this segment is very price sensitive. The questions are, "How many of these new users will go for socket 7 solutions, and how committed is Intel to servicing that segment? Is Intel committed to converting socket 7 to slot 1? If so, what will be the impact on Intel margins?" I guess I don't really expect you to have firm answers supported by marketing data, but I am very interested in your opinions. Thanks in advance, Gene