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

To: Xpiderman who wrote (50984)	3/23/1998 10:23:00 AM
From: Mary Cluney	Read Replies (4) \| Respond to of 186894

Xy Zhao,>>>Intel gets a challenge from 3 deals with IBM<<< Where Size Matters : For the same reasons MSFT dominates the software business, INTC dominates the microprocessor business. Size Matters. IMHO NSM, AMD and IDTI is to Intel as AAPL, NOVL, and NSCP is to Microsoft. I further submit that it is much easier for someone to come up with a new piece of software such as an O/S, LAN, or browser than it is for someone to come up with a new and more advanced microprocessor. Not that it is easy in either case, but the cost of entry to the microprocessor business is more prohibitive. NSM, AMD, and IDTI can compete at the margins - such as finding a new market at the low end or through reverse engineering to clone an Intel chip and sell it for less than Intel. That is like reverse engineering Coca Cola and then selling it for less. Outsourcing to IBM for manufacturing is equivalent to having Cadbury Schweppes bottling and distributing your product. It could be done - but that is not what I would call an attractive investment theme. Maybe I have missed something. Let me know. I'm open to any flaws in my logic. Regards, Mary

To: Xpiderman who wrote (50984)	3/23/1998 1:42:00 PM
From: Paul Engel	Respond to of 186894

Xy - Re: "''It's likely that they'll still be six to 12 months behind Intel if they rely on IBM,'' Gwennap noted. ''If they went with anyone else, they would probably be 12 months to two years behind.'' " This says it all. Of course, AMD & Cyrix and IDT all have their own fabs as well so they will be paying IBM for IBM's processing and depreciation as well as their own, not to mention a handsome profit to IBM for the use of IBM's facility. That is not a program geared to reduce costs. Paul