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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (36970)	11/19/1998 6:17:00 PM
From: rudedog	Read Replies (2) \| Respond to of 97611

NW - Right on, see my other posts. CPQ sells 4 times as many servers as Dell. High end chips are 10 times the price of desktop chips, and way better margins. You can pretty easily understand why Intel treats CPQ so well - a CPQ guy told a buddy of mine at COMDEX that CPQ is more than 20% of Intel's business and more than 30% of the high end business. That squares with their server share. Dell has got to be less than 10% of Intel's business in revenue terms even though they are 100% intel. You can just do the numbers based on units, distribution and price of the chips and see where Intel will come out on this. Some of the Dellheads brought this point up several months ago - the 'relationship' with Intel. Intel is absolutely the most hard-nosed company, the original 'what have you done for me lately' guys where lately is in the last 5 minutes. Everything at Intel is driven by the need to be able to predict fab schedules, since the costs are so huge. They can't turn the fab on and off like a faucet. Guys like Dell who keep no inventory and might call in today and want a lot, tomorrow and want a little are a royal pain to a capital-intensive manufacturer like Intel. Where would they be if they didn't have predictable demand running out a year or so for 20% of their product? It's not just the volume, it's also the predictability.