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: Joey Smith who wrote (65441)	9/25/1998 2:46:00 PM
From: Diamond Jim	Respond to of 186894

"Dell's success guarentees that sales of high-end Intel chips will be good!" ------------- DJ 09/25 14:30 [AMD,CPQ,DELL,HWP,IBM,MSFT] DELL DEFENDS RELATIONSHIPS WITH INTEL, MICROSOFT DJ 09/25 14:30 +DELL 'VERY BULLISH' OUTLOOK ON PC DEMAND DJ 09/25 14:30 [AMD,CPQ,DELL,HWP,IBM,MSFT] DELL SAYS BUSINESS IN ASIA STILL STRONG DESPITE TURMOIL DJ 09/25 14:30 [AMD,CPQ,DELL,HWP,IBM,MSFT] *DELL 'VERY BULLISH' OUTLOOK ON PC DEMAND

To: Joey Smith who wrote (65441)	9/26/1998 9:27:00 AM
From: herb will	Respond to of 186894

Joey, Re:This will be a main source of revenue and earnings growth for Intel for the forseable future. Interesting comments from the following url if anyone cares to read thru it. fabtech.org Excerpts from the article as follows.: "Our analysis shows that if there are real productivity benefits, $50 or $200 extra for a faster machine is virtually irrelevant to the average corporate user. But to Intel, such a minor shift in demand would produce a substantial change in margins. The astute investor would take the present slump as a great opportunity to buy, and bet on Intel's upside." "Market analysis: According to IC Insights, the global market for x86 microprocessors is estimated to be worth about $20.5 billion in 1998, for which Intel holds about 85% of the sales by dollars, with an average selling price of about $200. Our sources indicate that the global market for PCs will be about 90 to 100 million units per year, about 40% of which is sold in North America. Roughly three quarters of those are desktops, with the remainder laptops and others. At 100 million units, that suggests that the critical North American desktop market accounts for about 30 million CPUs a year. If we ignored the seasonal nature of demand, there is a minimum of 2.5 million CPUs sold per month, or 7.5 million CPUs per quarter. Although much of the low-end demand is for clones, Intel dominates the high end of this demand. Let us consider what a shift in demand would do for Intel's bottom line: (October, 98 Revenue Difference Forecast ASP) w/ next speed grade Processor Pentium 233 MMX $110- Pentium II 266 $160 $50 Pentium II 300 $210 $50 Pentium II 333 $250 $40 A shift of demand from Pentium 233 MMX to Pentium II 266 generates an incremental $50 in unit revenue, a shift from Pentium II 266 to Pentium II 300 produce a similar revenue increment. If we assume that 10% of the potential buyers can be induced to upgrade their purchase of a Pentium II 266 processor in lieu of cheaper Pentium 233 MMX processors, and similarly shift demand up the line. With 7.5 million units per quarter = 750,000 units X $50, or $37.5 million in incremental revenue per quarter for Intel. If the shift were to be more pronounced, or if the adoption rate were to be higher, it could raise the amount considerably." "While an incremental increase of $37.5 million in revenues per quarter may not appear to be much to a company that earned $1.37 billion in the quarter ended March 28, 1998, it should be noted that most of that amount would flow directly to the bottom line in many of the scenarios we investigated." Herb