Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Steve Porter who wrote (58748)	6/25/1998 1:31:00 AM
From: Dale J.	Read Replies (1) \| Respond to of 186894

Steve, If they are all competeing head to head and price keep falling everyone will lose a $hitload of cash. Do you think we are headed the way of DRAM and the D Drives? I myself don't believe we are, because unlike the DRAM and D Drives, Intel is significantly ahead of the competition (capacity,speed etc). I think Intel has also taken steps to move to a proprietary architecture (careful you know I aint technical). I think privately AMD and Cyrix have to be considering the futility of competing with Intel. Dale

To: Steve Porter who wrote (58748)	6/25/1998 12:35:00 PM
From: Tony Viola	Respond to of 186894

Steve, Dale said: "That will allow them to continue to be profitable even while Cyrix/AMD continue to lose money. Do you see this changing anytime soon?" You, Steve said: "Well if they all continue to compete head to head to head all of them will end up losing money." FWIW, article in the San Jose Mercury News Monday said they expect Xeon, and then Xeon/Merced to drive the earnings picture at Intel for the next five years. AMD and Cyrix have no chips to compete with Xeon and Merced. If the SJMN is right, and their premise has also been batted around here a lot lately, AMD and Cyrix will be competing with Intel in a niche (although important) market only. To me, it also says that AMD and Cyrix can't cause Intel to lose money. This is because the price umbrella for Xeon and Merced is going to be so wide, and there will be no need to bring it in without any competition, that those chips will be almost embarassingly profitable (once important errata are obliterated ;-)). Very high acceptance and sales of these chips is expected, what with NT explosive growth vs. UNIX, or, heck, Solaris growth also. Essentially all the major server players have announced server development around Xeon and Merced (even Sun and SGI for Merced). Intel should sell boatloads of them. Only Intel execution, or lack of same, can ruin this picture. All AMD and Cyrix can do is to push Intel gross margins down toward 50%, which Intel has been predicting anyway. 50% ain't as good as 60%, but it's still almost obscene in this or any business. Bottom line is Intel should get excellent margins from the high end chips, small margins (but positive) from low end chips. Tony