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

To: stak who wrote (67162)	10/22/1998 5:46:00 AM
From: Fred Fahmy	Read Replies (2) \| Respond to of 186894

ustak, <If "anyone" can do it then you must have some examples ready to list. How about 2 or 3 for reference? > Because most companies have profitability as a goal. That's exactly my point. Most companies who realize that the only way they can compete is to bleed red ink quarter after quarter and year after year would come to the conclusion that this strategy is not in their best interest. It's very rare indeed to find a company like AMD which is hell-bent on sticking with a proven losing strategy. Of course, Jerry is laughing all the way to the bank at the expense of AMD shareholders. Our tech company (which shall remain nameless) has successfully gained market share from our industry leader (who had 85% or better market share and tremendous brand recognition) without a significant price advantage. You are dead wrong if you think cut-throat pricing is the only strategy to gain market share. Unfortunately, like you, AMD believes this is the only possible strategy. Wendy's has gained and continues to gain market share at McDonald's expense with equivalent pricing. The Japanese auto makers gained market share (via quality) from the US car makers while actually selling at higher prices for the same class of car. <AMD's stealing of market share from Intel is truly a remarkable feat.> I'm glad you think so. It has been my observation that many AMD investors are easily impressed <gg>. I'm not sure all long time AMD investors are so impressed. After more than a decade AMD has not appreciated at all. What is really remarkable is that given this track record (much of which was during the greatest bull run in history) investors are still willing to trust Jerry with their money. Like Jerry always says "this time is different" <gg>. <There's not many times a competitor can go head to head with a behemoth and steal market share without some kind of advantage based not on price.> There is a big difference between "some kind of advantage based on price" and attempting to stay 25% below you competitor. If AMD's products are as great as Jerry's followers would have everyone believe then a 10% difference should have been sufficient to gain share. FF

To: stak who wrote (67162)	10/22/1998 10:11:00 AM
From: Mary Cluney	Read Replies (3) \| Respond to of 186894

stak,>>>AMD's stealing of market share from Intel is truly a remarkable feat. A new product can take market share from a monopoly if it is revolutionary such as the car taking over from the carriage or the BIC taking over from paper matches. There's not many times a competitor can go head to head with a behemoth and steal market share without some kind of advantage based not on price.<<< There is a lot of truth in both what you and Fred are saying. But, the key point both of you are missing is that this is a technology business - and there are inherent differences between this business and other consumer type businesses. When you are marketing beverages or detergents - you could initially gain attention with a low price - and when consumers tries it out and find it appealing for other reasons - the price could be raised to the level of whatever reasons the consumer find appealing about the product. Creative marketing, packaging, and other tweakings can enhance that competitiveness. But, in this case - coming up with a product is not a one time deal. It is an ongoing process coming up with significant new developements, product enhancements, and continuous improvements in manufacturing to lower costs and improve reliability. It is not a 100 yard dash. It is more like a marathon. The strategies have to be different. We, and especially Fred , have been bashing Jerry Sanders - a lot of it is for his own personal profligacy - but the truth is this guy has been very tenacious - and has kept this competition going where Fred's "better management" would have thrown in the towel long ago. The challenge that Jerry faces is that Intel is the standard and with that status - has built up financial resources that makes it tougher and tougher for anyone else to effectively compete. It is like being the incumbent in politics - the longer in office - the more patronage provided - the harder to unseat. Only in this case - there is only one Intel - and they have played the incumbency game very well - it gets tougher and tougher for anyone else to succeed. It's not easy being green (like Kermit the frog), but it's even more difficult being a clone (like AMD). In this case, either you are the standard - or you are not anything. They don't usually replace the heavyweight champion on points - you have to knock out the champion. Regards, Mary