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

To: Ian Davidson who wrote (48854)	2/25/1998 11:14:00 PM
From: greenspirit	Read Replies (3) \| Respond to of 186894

Ian, Article...Intel Shows It's Serious About Networking... By JONATHAN MARSHALL c.1998 San Francisco Chronicle ÿ ÿ ÿ ÿ ÿIn case anyone still thought it just makes computer chips, Intel Corp. hauled out some of its biggest guns Tuesday to promote its computer networking business. At a publicity bash in San Francisco for industry analysts and trade press, Intel unveiled a host of new products aimed at helping small- and medium-sized businesses connect their computers more efficiently. Intel said it was the biggest marketing event the networking division has held in seven years. ÿ ÿ ÿ ÿ ÿIntel President and Chief Operating Officer Craig Barrett said the company sees a huge potential in selling equipment to connect computer users in homes, small businesses and business campuses. ÿ ÿ ÿ ÿ ÿNoting that only a third of small businesses in the United States and Europe have networks allowing their computers to share files, printers or Internet access lines, Barrett said ''this is a wonderful opportunity that has been ignored by the (networking) industry.'' ÿ ÿ ÿ ÿ ÿIntel also announced Tuesday that it has formed a new home-networking division to create products for the 30 million households projected to own two or more computers by the year 2000. ÿ ÿ ÿ ÿ ÿ''There's tremendous pent-up demand and excitement in this market,'' said Mark Christensen, Intel vice president for small business and networking. ''It's absolutely critical to us.'' ÿ ÿ ÿ ÿ ÿIndustry analysts who attended the event said it eliminated any suspicions that Intel is just a networking dilettante. ÿ ÿ ÿ ÿ ÿ''Intel is truly serious about networking,'' said John Armstrong, an analyst at Dataquest. ''For a long time, networking was just a side business to sell more Pentiums on the desktop. But now it's clear Intel wants to be a major player.'' ÿ ÿ ÿ ÿ ÿIntel's networking division introduced 30 new products last year and did more than $600 million worth of business, Armstrong estimated. That's a drop in the bucket compared to the company's total 1997 sales of $25 billion. ÿ ÿ ÿ ÿ ÿIntel's Christensen refused to say Tuesday whether the networking division made a profit. ''We don't give out detailed profit and loss figures,'' he said. ''But we are committed that this will be a very large and profitable business.'' ÿ ÿ ÿ ÿ ÿBarrett added in an interview that Intel expects to turn its network division into a multibillion-dollar business within a few years. ''We grew quite a bit faster than the network industry as a whole last year,'' he said. ÿ ÿ ÿ ÿ ÿMichelle McLean, an analyst with the Meta Group in Burlingame, said Intel has an opportunity to exploit its brand name and clout in retail channels to make headway in the home and small business markets. ÿ ÿ ÿ ÿ ÿBut in the home market, she noted, Intel has no products yet. Among large corporate customers, Intel doesn't even make the top 10 list of networking vendors. And in other markets it faces a tough fight from entrenched competitors. ''It doesn't strike me that Intel offers anything unique,'' she said. ÿ ÿ ÿ ÿ ÿIntel also enjoys prowess in manufacturing, which keeps its product costs low. But the competition Intel faces in the networking market is a far cry from its near monopoly of high-margin microprocessors. ÿ ÿ ÿ ÿ ÿLast year, Intel slashed prices on PC cards that let computers talk to computer networks, hoping to knock 3Com Corp., another Santa Clara company, out of first place in that market. But 3Com more than held its own. ÿ ÿ ÿ ÿ ÿIntel has ''been extremely aggressive, to the point of predatory,'' said Doug Spreng, executive vice president at 3Com. ''But it hasn't gained them revenue or profitability. They've lost market share to us since their big price cuts last year. We expect to win decisively in 1998.'' ÿ ÿ ÿ ÿ ÿBay Networks, which sells low-end networking products that compete with Intel's on the shelves of Fry's Electronics and other retail outlets, also said yesterday's product announcements from Intel posed no threat to its business. ÿ ÿ ÿ ÿ ÿLloyd Carney, executive vice president at Bay, said Bay's comparable products still offer more bang for the buck. And larger companies prefer buying from Bay because it supplies a full range of networking products, including high-end devices, unlike Intel. ÿ ÿ ÿ ÿ ÿ''Networking is tangential to Intel's core business,'' he said. ''Our customers know we won't wake up a year from now and decide to leave this business. Intel isn't keeping me up at nights at all.'' _____________________________________________________________________ Regards, Michaelÿ ÿ ÿ ÿ ÿ ÿ