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

To: Jay who wrote (77351)	3/27/1999 1:53:00 PM
From: Amy J	Read Replies (1) \| Respond to of 186894

Re: "One possible idea: everyone knows that the phone companies are going real slow in rolling out ADSL. Why doesn't Intel..." I couldn't agree with you more about the slow rollout of high-speed transmissions, which may delay a particular wave of growth in the PC market spawned from emerging technologies that'll make the PC like an interactive TV. There are only 50,000 ADSL users today per one phone company which expects this number to triple by the end of the year and to reach 5M in 2002. Only 75% of their customer base will qualify for ADSL use, the others are too far away from the Central Office, etc. 5M is a low number when thought in terms of home PC rollouts. Intel seemed to burn relationships with the cable guys several years ago when MS & Intel together approached TCI, etc. and annoyed the cable guys by telling them what they should do. And now @home (@work) is under the management umbrella of a cable company that appears to be more pro-TV than pro-PC. The phone companies seem to be more friendlier to PC/high-tech companies than the cable companies, so hopefully Intel will continue to work in this direction. Re: "Why doesn't Intel muscle in on some of the companies and start providing ADSL service?" Because it's a service which operates at a loss. Intel would probably rather see the phone companies roll this out at a loss and have it show up on their balance sheet, not Intel's balance sheet. One way to get ADSL rolling out quicker is for the phone companies to do something cool like changing their revenue model away from direct ADSL consumer subscription fees and into indirect royalty fees paid by portals or ecommerce companies... by providing low cost service (i.e. $10/mo) to customers of a particular e-commerce/portal subscription service (e.g. SI) and charge the portal a royalty (per user). [Side note: In the unusual situation where the portal company is an ISP, it's an unusual win if they are able to gain an agreement with the phone company to be the ISP provider for its members (currently, the phone company just recommends only one ISP at a discount cost.)] It's just a repackaging of the same cost but calling it something different to the end-user and making it more appealing, like, "SI members can get ADSL service for $10/mo and your experience with SI will be better with ADSL." Meanwhile, behind the scenes, the same dollars are getting paid to the phone company, but possibly somewhat subsidized by those members who do not use the higher-end services. Maybe that would get ADSL rolling :) I heard Mark Cuban of Broadcast.com is advocating the phone companies employ an e-commerce biz model to roll out ADSL faster. The royalty fees from portal subscriptions would be a more natural and easier roll out. I don't see Amazon wanting to pay a royalty (so I didn't fully understand his model), but I could see a portal subscription company wanting to do so (especially if their portal biz growth is limited by today's downstream speeds....i.e. if it's a graphic intensive service) because it improves their portal service and makes it a better experience for their users. Also, it might help customer loyalty since people would be somewhat dependent upon the portal service which provides them their ADSL. Amy J