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

To: Joe NYC who wrote (45605)	1/15/1998 3:06:00 AM
From: Gary Ng	Respond to of 186894

Jozef, Re: Under a classic free market theory, artificially high profit margins attract new participants Exactly the situation we saw for the past few years. We have superior chips from DEC (Alpha), IBM (PPC), MIPS, AMD CYRIX , IDT chasing after this highly profitable market. They are all faster, cheaper, better but almost all the chips they made were(are) selling at a loss. I believe Intel must be blessed from up above to be the only company enjoying this artificially high profit margin. Gary

To: Joe NYC who wrote (45605)	1/15/1998 11:28:00 AM
From: John Hull	Respond to of 186894

Joe, Intel's position in the market is a result of continuous improvement and innovation. If Intel operated like the "chip" business in the snack-food industry (same or fewer chips in a bag every year for a gradually increasing price) we'd be out of business in no time. To stay afloat in microprocessors, you have to find a way to sell twice as much product each year for the same price (at a minimum). There's a new entrant popping up all the time. Its absolutely not impossible to get into this business. All you need to do to be successful is execute, execute, execute. That's the part that's not easy. Paul Engle posted a note about eight months ago that listed all the various competitors that have at one time or another entered and competed in the microprocessor business with Intel. Many are still competing, some are not. In every case, its been execution that's made the difference. By the way, in the potato-chip business, I believe Frito-Lay has >50% market segment share [somebody who knows for sure please help me out here]. Their success has been the result of superior execution. You've clearly read the theory on the subject and articulate your points well. I just differ on your diagnosis of Intel's situation. Regards, John Hull