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To: Jeff Fox who wrote (60517)	7/16/1998 10:11:00 AM
From: Barry Grossman	Respond to of 186894

Jeff, Those were excellent answers to Jacob's good questions. in the succeeding quarters as they will sell this "cheaper" inventory at new cheaper prices. They will be able to show good margins while expanding the market and making life "difficult" for its competitors Of coarse, I expect that the media will report this when it happens as : "Intel lowers prices once again to move slow moving products - Profit margins going forward called into question - ASP declining quicker than expected" Not - "Intel maintains margins and grows market". Jacob - My favorite statistics quote goes, "There are lies, damn lies and statistics." Barry

To: Jeff Fox who wrote (60517)	7/16/1998 10:53:00 AM
From: Jacob Snyder	Read Replies (1) \| Respond to of 186894

thanks, Jeff, for the clear and comprehensive answer. eom.

To: Jeff Fox who wrote (60517)	7/16/1998 11:08:00 AM
From: TTOSBT	Respond to of 186894

Re: "Intel earnings: can someone explain" Jeff your a real Fox! excellent summation! TTOSBT

To: Jeff Fox who wrote (60517)	7/16/1998 11:47:00 AM
From: Tony Viola	Respond to of 186894

Jeff, about the inventory writedown, there was a question on the conference call about that. Bryant used an example with numbers that got this old hardware hacker to understand, so I thought I'd pass it on. He said, for example, Intel may go into a quarter like 2Q calculating that product A would cost 10› to manufacture in April, 9› in May and 8› in June.Looking at the numbers at the end of 2Q, he said that product A actually cost 10› in April, 8› in May and 6› in June (better cost reduction than anticipated). The rule is that they have to value all of product A inventory left at the end of the quarter at 6› each, whether manufactured in April, May or June. This is lower than the 8› they had predicted. This difference in valuation has to be "written down", or taken as a charge. Like you said, this will turn into all good news for 3Q, as that lower cost to manufacture will continue, and help result in higher profit per chip. Tony