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To: Jeff Sheeran who wrote (29896)	4/22/1999 6:53:00 PM
From: Jeff Sheeran	Respond to of 45548

Intel to tackle the Internet Chip maker outlines strategy to become 'e-business' leader cnnfn.com Intel to tackle the Internet Chip maker outlines strategy to become 'e-business' leader April 22, 1999: 6:38 p.m. ET NEW YORK (CNNfn) - Intel Corp. executives outlined a strategy Thursday to be a leader in Internet commerce and said the chip giant will derive 90 percent of its revenue from electronic commerce by 2002. "Our goal is to be the building-block supplier to the Internet economy," Craig Barrett, Intel (INTC) president and chief executive officer, told a group of financial analysts in New York. Barrett added that Intel plans to target products and services to two new markets: telecommunications firms and Internet service providers (ISPs). "As data communications and voice communications collide, the market will combine with standard building blocks," he said. "We want to make the Intel architecture the platform on which all of these technologies run." Paul Otellini, executive vice president of the Intel Architecture business group, said it will increasingly target its high-end chip offerings to Internet providers. "The bulk of our server growth over the next few years are going to be at ISPs," Otellini said. Intel inside all devices? As part of its strategy, Intel plans to develop products for a broad spectrum of Internet-related devices, from handheld consumer appliances to corporate servers. Intel officials also detailed the company's efforts to offer products outside its traditional PC niche, including products for home networking and content and data services for Internet firms. And as Intel increasingly develops products for a variety of computing devices, its chips will support operating systems other than Microsoft Corp.'s (MSFT) Windows and Windows CE. Otellini said chips designed for consumer devices will support Linux and Be Inc.'s BeOS, among others. The Web as sales channel As Intel sharpens its focus on the Internet, the company will use the Web as a new distribution channel. Mark Christensen, general manager of Intel's network communications group, said the company's AnyPoint home networking product is the first to be offered direct from the company through its Web site. Sean Maloney, Intel senior vice president, sales and marketing, said 90 percent of Intel's revenue will be derived from e-commerce transactions in the next two to three years. The Internet also is providing a boost to Intel's core PC-chip business, as ISPs subsidize the cost of new, low-cost PCs by luring customers with free Internet access. "The emergence of online resellers … is helping move a substantial number of PCs," Maloney said. "It doesn't just benefit the low end. We're also seeing strong activity of the same type of deals in [computers with] the Pentium III processor." Intel also detailed its chip strategy for the next year. Otellini said a 700-MHz Pentium chip should be available in mainstream PCs in the first half of 2000. Currently, Intel's fastest Pentium chip runs at 550 MHz. Otellini also eased analysts' fears about pricing pressures, noting that the average selling price of Intel's chips has remained steady for the last seven quarters. Intel shares rose 3-1/16 to close at 61-1/2 in Thursday trade. -- by staff writer John Frederick Moore