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

To: Paul Engel who wrote (50246)	3/9/1998 2:13:00 PM
From: dmf	Read Replies (1) \| Respond to of 186894

Paul: RE: "Compaq Outside" Compaq went after the low end and is now identified with the cheapies. Buyers wanting high end performance are not looking to Compaq. I think Compaq may be the biggest factor in Dells success. Guess I can't believe what Compaq has done to their brand name. Interesting. dmf

To: Paul Engel who wrote (50246)	3/10/1998 1:17:00 AM
From: ed	Read Replies (2) \| Respond to of 186894

I agree , CPQ will probably make even this quarter ( However it may end up with a surprise, a happy one. You must agree that there are 20 more days before the book is closed for this quarter). But for your investment, you are not looking at one or two quarters, you are looking at many many years to come. CPQ is pave the foundation for the next century. The recent pain of CPQ is just a resut of transfer from PTO(Prediction to order) business model to BTO (build to order , or on time delivery model, Japanese call it this way) business model. Once this transation is done, CPQ will be much stronger. As to Intel, it is making money all right, just like I said your investment is based on the strength of the company of many many years to come. Intel's current price is based on the 50% profit margin, if the margin continues to degrade, then you will know what will happen to the stock price years to come. I have already mentioned in my previous post that as a result of 1) Competitions from AMD , Cyrx. 2) The new BTO business model put a lot of pressure on INTEL to build up high inventory to meet the on time delivery requirement set by the box makers, which means higher cost to do business for INTEL. 3) The sub$1000 PCs will degrade INTEL's profit margin Intel's cost of PII based on my reasonable calculation is about $30 with .35 um technology, selling for $100, the profit margin is already too high, not to mention $200. So, INTEL has a lot to cut, and CPQ is right. If INTEL will not cut, then AMD and CYRX will cut for it. So, with the profit margin expect to be degraded continuously in the years to come, what do you think INTEL's stock price will be, say, 30% of profit margin at end of 1999 ?