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

To: Glenn Barrera who wrote (61067)	7/23/1998 10:57:00 PM
From: TTOSBT	Read Replies (1) \| Respond to of 186894

Re: "Think of intc's fixed costs. Do you see a problem when they start shifting to lower cost cpu's (unless the volume makes up for it or they sell enough high end Xeon's or some other revenue increase)?" There is one big factor Kurlak always leaves out when predicting Intel's future, and your doing it here. He did it when the .18 micron was first mentioned. He said something to the effect that Intel will flood the market cause the .18 micron was using less materials so their would be an over supply of chips. He always UNDERESTIMATES INTEL MANAGEMENT! Don't you think if you know it and he knows it that Intel's management knows it also and that they have already worked it out. Just because they haven't let all the details out doesn't mean you can factor them in as negatives. Wall Street loves Intel because it is one of those few companies you can count on to fill in all the blanks. Then if you lose you know you had the best shot bar none! TTOSBT

To: Glenn Barrera who wrote (61067)	7/23/1998 11:17:00 PM
From: DownSouth	Respond to of 186894

OK. So the math is: Make a processor that sells for less you make less money unless you sell more (Price elasticity) and/or make it for less (economies of scale). Make a processor that sells for less you make less money unless create a product mix that his substantial high margin, high end processors. (Market segmentation.) I believe you understand INTC's strategy without even seeming to understand their outstanding engineering and fab talent. Now YOU go inform the "doctor".

To: Glenn Barrera who wrote (61067)	7/23/1998 11:55:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 186894

Glenn - Re: "a product mix when you replace one processor with one that sells for less (unless you can make it for less). " You are missing the big picture. The cheap Celeron is replacing the Pentium MMX. At $100 for a Celeron, it will replace a Pentium MMX which sells from $75 to $125 - on average, it will be a wash. The die size is also comparable - with desktop Pentium MMX's still being 0.35 micron parts (128 - 140 sq. mm) vs, 131 sq. mm for the 0.25 micron Celeron. Intel's shipped about 10 million Pentium MMX's last quarter - so shipping a mixture of Celerons from $100 to $200 may actually RAISE the ASPs! Note - the margins may not increase because the Mendocino Celerons will have a larger die size - but keeping the margins CONSTANT - while replacing 10 million Pentium MMX's at the low end is a heckuva trick. And 400 and 450 MHz Pentium II's and XEONS will BOOST ASP's and margins. Think of that ! Paul