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

To: Reginald Middleton who wrote (57357)	6/5/1998 9:23:00 PM
From: Paul Fiondella	Read Replies (2) \| Respond to of 186894

Never underestimate IBM They clearly have the ability to compete with Intel in both the design and manufacture of CPU's. You may recall their copper technology innovations. However in the area of 8086 compatible CPU's where Intel has the edge there is no IBM design, so as IBM has done previously, it goes and finds somebody that can produce the chip and buys it --- in this case AMD. IBM is also more diversified as a corporation than INTC (both in products and markets that it participates in). A slowdown in the PC industry, if it remains focused on the PC industry and does not spread up the food chain would weaken INTC vis a vi IBM. IBM is also well aware of the Wintel weed that took over its garden. It is heavily invested in areas of the server market that Intel has now delayed entry into. So I wouldn't bet too much on Intel's expertise overcoming its weaknesses in competing with IBM. IBM also has a far better understanding of software and service than Intel can ever hope to obtain. So IBM has the advantage in research, in service, in software and in the server and DP markets. Although this is only a small point in the discussion it is never the less a strategic one when it comes to the politics of the industry. IBM needs to have both AMD and NatSemi viable in the PC arena to keep Intel from consolidating its monopoly. It has learned a greatdeal from its WIntel experience and is working to undermine market dependance upon both MSFT and Intel. Other issues you raise are a matter of serious further inquiry. Does the Celeron compete at price/performance levels to AMD's chips with the new price cuts? Since prices change this is something to follow. Will Intel outprice AMD? (Well what happens to their business model if they do this or do you see that model having changed?) Does AMD have a capital crunch in its future based upon FAB construction needs for its existing product lines? Will compression hurt AMD more than INTC in terms of share price? (hmmm 18 vs 70, who can shrink more? be sure to figure in panic bailing out of a sinking stock) Being able to pay your bills. (Poor AMD!) ==================== In the end its not what Intel does to AMD but what Intel does to its investors (those who hold the stock at prices based upon very high expectations). I look forward to other people contributing some answers to the questions you raise.

To: Reginald Middleton who wrote (57357)	6/6/1998 9:32:00 AM
From: Reginald Middleton	Respond to of 186894

These are snippets of the AMD 10K that I cut out of Paul's post on the AMD thread. They are relevant because they cast my earlier posts in a realistic light and they reinforce my assertion that the INTC is currently "buying" back the lower end of the market at discount prices, and with proprietary architecture, to the detriment of AMD and any other player. Add that to the fact that they are about to push into the ultra high margin server business, and you have much better times ahead, quite possibly for a long time. April 23, 1998 ADVANCED MICRO DEVICES INC (AMD) Quarterly Report (SEC form 10-Q) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Statement Regarding Forward-Looking Statements The statements in this Management's Discussion and Analysis of Financial Condition and Results of Operations that are forward-looking are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially. The forward-looking statements relate to operating results; anticipated cash flows; realization of net deferred tax assets; capital expenditures; adequacy of resources to fund operations and capital investments; the Company's ability to access external sources of capital; the Company's ability to transition to new process technologies; anticipated market growth; Cash flow problems, capital expenditures, adequacy to fund operations and capital investments, access to external sources of capital, transition to new technologies. The decline in CPG sales from the fourth quarter of 1997 to the first quarter of 1998 was due to lower average selling prices for the AMD-K6 microprocessor, as unit volume remained relatively flat. During the first quarter of 1998, the microprocessor market migrated to higher performance products, which the Company only manufactured in limited quantities. This migration, together with increased price competition, resulted in a reduction of the average selling price on AMD microprocessor products. In addition, due to inadequate manufacturing yields on AMD-K6 microprocessors, the Company was unable to increase microprocessor unit volume. CPG sales growth during the remainder of 1998 is dependent on a successful transition to the 0.25 micron process technology in Fab 25 in order to meet customer microprocessor needs for performance and volume. This, in a nutshell sumamrizes what I stated in my last post concerning the effects of the compression of demand and the incessant prioce cutting of INTC. If it hurts INTC, it si killing AMD. AMD does not have the cash to go head to head with INTC.