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

To: Paul Engel who wrote (50163)	3/8/1998 5:19:00 PM
From: M31	Read Replies (2) \| Respond to of 186894

Paul--Thanks for such a prompt and detailed answer. It's obvious why there are over 50,000 messages on this thread. M31

To: Paul Engel who wrote (50163)	3/9/1998 1:56:00 AM
From: ed	Read Replies (2) \| Respond to of 186894

Paul, I do not agree your statement that CPQ is sitting on a big inventory. The total shipment of PCs in 1997 is about 90 MM units, and CPQ had about 15% of the world market share, i.e 13.5 MM units.With 0.2MM units in the channel, the inventory is about 1.5% of its annual sales in term of units. It can be digested by itself pretty soon!!! Do you think CPQ had to digest those inventory in the US market only ? I do not think so. Those units can be shipped to anywhere around the world and be digested. I bet you will soon see $1000 233 Mhrz with MMX PCs in the Chinese pretty soon and those units were from CPQ's inventory, as well as East Europe and South America. It is very common to have some inventory after the hot season sales of Christmas and New Year, I do not it is CPQ alone has inventory in Jan and Feb time frame of every year. All in all, if those box makers end up with big inventory, who will got hurt the most ? and you know it !!! The box makers can just put off their orders of CPUs and wait till the inventory got digested by itself. The DEC deal is a steal to CPQ, and will help CPQ open the door of the high profit enterprise market. I think you also realize that since DEC of 1996, DEC had made money consistently quarter after quarter As for DELLl, the only weapon it has now is the BTO model and it can be implemented easily by other box makers ( CPQ can keep a dual syatem in the beginning and transfer slowly). Besides that , I do not know what DELL will have to compete in the next ten years. From my point , DELL is just a short play and will be history pretty soon.All in All, is still a box maker with screw drivers. The problem for INTEL is 1) The competition from AMD and Cyrex. I think you already heard the news that AMD came to a deal with AMD to process AMD's CPU in its advanced fab, and that National cut a deal with TSMC in Taiwan to manufacture up to 10MM units of CPU annualy. They must see the market for their products, the CPUs, so does IBM . The recent short fall in INTEL's revenue and profit margin not just came from inventory of those box makers , but the competitions, and this will stay long for the years to come. INTEL held 90% of the CPU market in 1997, and I bet the percentage will continue to be degraded in the year to come.