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To: Mang Cheng who wrote (14107)	2/26/1998 8:44:00 PM
From: John F. Dowd	Respond to of 45548

Dear Mang: Network margins are much lower than the "non comodity" cpu margins. I think this is just another Andie Grove focus group effort.He is trying to push the band width bottlenecks. Note that they are huddling with the RBOC's about improving the bandwidth of the carriers. As he sees it what good is all the terminal horsepower if you can't use it. It really doesn't make a lot of sense for INTC profit-wise to spend too much capital in an already overcrowded market place where they have no brand or OS monopoly. On the other hand if the convergence of cpu/comm brings about standards which cause comodization of cpu/network chips then INTC will be ready to produce those chips. I really don't think networking is a big profit item for INTC but it might be the periphery of their next generation of chips. Regards, John