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

To: Patrick Grinsell who wrote (68024)	11/7/1998 1:33:00 AM
From: Elmer	Read Replies (1) \| Respond to of 186894

Re: "Let me rephrase my earlier question. The K7 is obviously poised as a high-end desktop solution. This is where I believe the meat of the market is. What does Intel have to combat this threat (other than allowing AMD to implode as usual)?" Patrick, it is expected that you will at least do your homework and know what Intel's current offerings are and what has been discussed here and in the press as to Intel's future plans. Go find out what a Xeon is and what a Katmai is and what a Cascades is. This will answer many of your questions. As for the K7, many of us here have been in the industry long enough to know that it is one thing to flip foils about a new architecture, and quite another thing to produce a quality, manufacturable, profitable product. AMD is still in the foil flipping stage. We still know hardly anything about it. Why don't we wait and see if they can manufacture it? EP

To: Patrick Grinsell who wrote (68024)	11/7/1998 3:46:00 AM
From: Tenchusatsu	Read Replies (1) \| Respond to of 186894

<It emphasizes my position here. The high-end is nowhere for Intel to escape to. It is much to small. A 10% loss of marketshare in the desktop market would have to be made up by a tripling or quadrupling in the server market.> Not really. The server market commands higher margins. How else can a Celeron go for $120 while a Xeon goes for up to $2500? It's just very different market dynamics. Besides, Intel already knows that the server market is very low volume. Bread-n-butter it isn't, but caviar and filet mignon it is. <Let me rephrase my earlier question. The K7 is obviously poised as a high-end desktop solution. This is where I believe the meat of the market is. What does Intel have to combat this threat (other than allowing AMD to implode as usual)?> In the short term, Intel is counting on several advantages: 1) Intel will release their 0.18 micron processors before AMD. That means that Intel can crank up the frequencies on their future P6 CPU's higher than AMD can crank up their K7 on the 0.25 micron process. Of course, AMD will get to 0.18 micron sooner or later, but that should buy Intel some time before Willamette and Foster. (You've heard of Willamette and Foster, right?) 2) Intel will push the Katmai New Instructions (the so-called MMX2) like crazy. From what I've heard, AMD has no extensions to 3D-Now planned for the first release of K7, so it will be kind of hard to push developers on 3D-Now when the superior KNI is out there. AMD may either decide to implement KNI-compatibility, or they may decide to extend 3D-Now even further, but that won't be for a while it seems. 3) Intel can just use brute-force production volumes, while AMD is still saddled with their lack of capacity. It won't matter if the K7 is even twice the performance of Intel's fastest processor if AMD can't make more than 100K per quarter. And AMD really can't do that without moving away from the el cheapo sub-$1000 market, but AMD also can't screw over their new-found customers. This may change once AMD's new Dresden fab cranks up, but once again, this buys Intel more time until Willamette and Foster. 4) Intel will count on the fact that they have more experience with platform and chipset design than AMD. Intel already has a slew of chipsets out in the market, like 440LX, 440BX, 440GX, and 450NX. Plus, Intel has even more coming, like Camino, Carmel, and Whitney. And never forget that Intel does a great job getting system manufacturers up-to-speed on their latest chipsets and platform technologies. AMD, on the other hand, is relying solely on borrowed technology from Digital's Alpha platforms. No one knows how well AMD will do when it comes to the down-n-dirty implementation. 5) If all else fails, at least Intel has more cash and more diversity than AMD who seems to be pursuing the CPU race at the expense of their other markets. If the FTC looks the other way (which isn't likely in my opinion), Intel can drive down their prices even further and put even more pressure on AMD. Like I said before, all these advantages may only be temporary, but they will buy Intel more time until the P7 processors (Willamette and Foster) are released in late 2000 or early 2001. And trust me, the P7 processors go way beyond AMD's K7. How do I know? Well, I'm lucky enough to have friends and a roommate who work on Willamette. Tenchusatsu

To: Patrick Grinsell who wrote (68024)	11/7/1998 10:33:00 AM
From: rudedog	Read Replies (1) \| Respond to of 186894

Patrick - During the same quarter less than 500K servers were shipped. You are looking at 'industry standard servers' (i.e. Intel-based). Intel already has something close to 100% of that business, by definition. The rest of the high end market is a target which Intel architecture machines can target, both in IA32 today and IA64 in the future. This is not only High ASP and High margin, but the market as a whole is 4 times as large as the whole of the PC market in revenue terms. This is a huge opportunity for Intel. This is the reason for the large investments of both resource and executive mindshare with HP, IBM, Sun, and others. The high-end is nowhere for Intel to escape to. It is much to small. A 10% loss of marketshare in the desktop market would have to be made up by a tripling or quadrupling in the server market CPQ has had more than 60% of it's profit from servers for more than 3 years. So let's see, how many $150 parts do I have to sell to equal one $4000 part? and what about margins? In CPQ's case, with Desktop ASPs heading to $1K and margins near 20%, and server ASPs heading to $20K and margins near 35%, which way will management go? Your analysis of the relative values in these markets does not square with the thinking of any of the major OEMs, all of whom see the desktop business as an increasingly commoditized space with little profit potential, and the high end as the inevitable next market. Server shmerver, Intel is making its bread and butter in the desktop. Desktops are an increasingly poor growth vehicle for everyone. CPQ figures that desktop revenue will be less than 20% of their total revenue within 2 years. It is already a small fraction for IBM and HP. Even Dell is predicting a shift to less than 50% desktop revenue within the next few years. And in terms of margin contribution the desktop segment will be in single digits maybe as soon as next year. Don't confuse unit volume with revenue or margin.

To: Patrick Grinsell who wrote (68024)	11/7/1998 10:36:00 AM
From: Tony Viola	Read Replies (1) \| Respond to of 186894

Patrick, >>>Just like I thought. I took a trip over to www.idc.com and found out that Q2 of 98 20 million PC's were shipped worldwide. During the same quarter less than 500K servers were shipped.<<< Can you get a list, or at least the top five or six of the server manufacturers' and model numbers that were included in that survey? Also, get the $$ amount. When I see the list, I bet I can double or triple it in terms of $$. Two reasons, 1. that survey doesn't know what all constitutes "servers". 2. Servers are much more expensive on average than PCs. 1 again, it's like the term motor vehicle does not just include cars. Examples, Suns sparc series up to the E1000 mainframe class and all system 390's, heretofore known as mainframes, are called servers now. That survey doesn't know that. 2 again, those servers I mentioned cost tens to millions of $$ each. Intel will get into the "server" market from bottom to top now and in the next three years with all their new and more powerful chips. Tony