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To: joe who wrote (21511)	9/15/1998 4:36:00 PM
From: jim bender	Respond to of 45548

Intel CEO: Will Pursue Networked PCs For Home Dow Jones Newswires By Christopher Grimes NEW YORK (Dow Jones)--Intel Corp. (INTC) Chairman and Chief Executive Craig Barrett said the company has a "fundamental disagreement" with the Federal Trade Commission over the interpretation of antitrust law. Barrett, speaking to reporters Tuesday in a conference call, said the FTC's antitrust investigation into Intel is based on a flawed assumption that it is a monopoly. 'If we're a monopolist . . . we're a crummy monopolist,' he said, noting that the company's earnings and revenues have been stalled of late. Barrett said he doesn't quarrel with the facts of the FTC's case: that Intel threatened to cut off chip supplies to companies with which it had patent disputes. These actions - taken against Intergraph Corp. (INGR), Compaq Computer Corp. (CPQ) and Digital Equipment Corp., which Compaq acquired this year - were legal, he said. Further, the FTC investigation hasn't changed the way Intel does business, he said. Barrett's comments to reporters came after speaking at the Intel Developer's Conference in Palm Springs, Calif. In his remarks, Barrett told the assembled industry technicians how Intel will address the increasingly fragmented PC market. Specifically, he said the industry will need to make computers easier to use and more easily connected to one another. Connecting PCs is Intel's overarching strategy these days. Company officials are fond of saying they want to see Intel chips powering "a billion connected computers." Which is one reason rumors caught fire last week that Intel was looking to buy networking company 3Com Corp. (COMS). Barrett wouldn't comment on the rumors, citing company policy. Intel's Barrett said the company is generally not interested in the "enterprise or backbone" networking equipment that is the specialty of companies like 3Com or Cisco Systems Inc. (CSCO). Rather, Intel is hoping to push networking into the home, creating simple devices that link several PCs together in one household. Barrett said connecting home computers should be as easy as hooking up a stereo's tuner and speakers. He didn't completely rule out an acquisition, however. "We keep our eyes open and look around," he said. Later, he noted that "we have a fair amount of cash, and our credit line is reasonably good." Intel ended the second quarter with $7.7 billion in cash and short-term investments. Unlike this time a year ago, Intel is more willing to talk about falling PC prices as a reality. It has come up with a "segmented" strategy this year with the Celeron line to address the sub-$1,000 market, reserving the Pentium II chip for users with more demanding needs. It also has the Xeon chip, used for engineering computers and high-powered servers. Barrett said it's likely that PC prices could hit $500 with a monitor, but questioned how useful they would be. "What we're doing is watching where the market develops," he said. "Clearly we're taking the Celeron down into the space well below $1,000, and if the market develops further we'll be adaptable and chase it further." Reports surfaced in late August that the Justice Department subpoenaed notes from a 1995 meeting between Intel's then-CEO Andrew Grove and Bill Gates, Microsoft Corp.'s (MSFT) chief executive. The notes apparently revealed a heated dispute over Intel's Internet strategy, which differed from Microsoft's. According to the New York Times, Microsoft threatened to abandon Intel's chips unless it changed course. Asked to comment, Intel's Barrett said his company "still has a good working relationship with Microsoft." He said the company still is active in investing in Internet-related companies and continues basic Internet research in-house. He said the company was still evaluating a design from Hewlett-Packard Co. (HWP), International Business Machines Corp. (IBM) and Compaq to change a key component in a computer's guts, the "bus." The three companies said last week that they had jointly developed a new bus for large computers that runs twice as fast as the current one. The bus is a pipeline that transmits information from the main computer chip to other devices, like memory chips and disk drives. Analysts said the companies developed the new bus - which has to be approved by an industry standards committee - to restrict Intel's control of a computer's insides. It was also seen as a slap at Dell Computer Corp. (DELL), which would presumably be a few paces behind if the new technology is adopted because the other companies already know the bus's specifications. Barrett said Intel has a position on the standards committee and would have a vote on whether to adopt the bus. - Christopher Grimes; 201-938-5253