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

To: Marc A. Bttcher who wrote (50067)	3/7/1998 1:17:00 PM
From: A. Fineigler	Respond to of 186894

Why Intel growth rate is slowing and will continue to do so for the next year or so ... some thoughts. I should preface this by saying I do own and continue to hold INTC, and will continue to do so with a long-term horizon in mind. So I wish Intel the best of luck. The slowdown rationale guesses: - There's no compelling reason to upgrade at present. Even a 90MHz Pentium runs most applications pefectly well. Buying more memory or a bigger monitor or a faster modem is a preferable upgrade (and cheaper) to buying a new system for many people, even in the corporate environment. - SE Asia does have some impact. Perhaps not massive, but not zero either. - Cyrix and AMD are having some impact. Again not massive, but not zero either. Until Intel has a commanding technological lead which is a strong draw to users, Cyrix and AMD may be able to take ever increasing (although never dominant) market share. Anecdotal evidence of an admittedly small sample of friends and colleagues indicates that home and small office users don't care which brand of chip they use, as long as it runs the software correctly. With Intel's bugs in recent years they have no quality premium in the minds of people I know. So it boils down to price-performace, and Intel is not the leader in the low-end to mid-range in price-performance. Intel does have far better channels and Marketing, which helps them considerably. - Intel's Merced chip will be a great success. But it will take some years to ramp up as a major business. It will not contribute much to the bottom line in the next year. Until there are very attractive applications which require much greater performance from systems, the upgrade market will probably be weak relative to recent years. IMHO it would not be surprising if INTC price stumbles along, with some dips and spikes along the way, for the next 6-12 months before entering a new upwards price surge. I don't know if this is a typical small investor viewpoint, but as I have a very long term view of this stock I am more or less ignoring the fumbles along the way. If it gets down to 30 or 40 I'll buy a bunch more. If another vendor suddenly comes out of the woodwork and starts taking the technology and market-share lead I'll switch. Otherwise, it gathers dust until I retire. Good luck. AF