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

To: Mary Cluney who wrote (80071)	4/26/1999 1:29:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 186894

Mary, In all due respect...you're overall analysis may have the right conclusion but... Do you really think that they would go into this without having studied the H*ll out this buisness and developed business plans with a high margin built in. The answer is yes...they would. Intel has a habit of throwing lots of fish on the fire just to see what'll cook. Microsoft does this as well. They indeed might have a set of clear expectation but this could easily be a wild ride they are willing to take. Intel needs to find new revenue generating markets if they expect to continue to grow. This is as good as any. OG

To: Mary Cluney who wrote (80071)	4/27/1999 11:43:00 AM
From: Harry Landsiedel	Respond to of 186894

Mary. Re: "Let's give Intel a little bit of credit." Always prepared to do that. But after the company admitted missing the low end in their primary business (see the annual report), we must be paranoid to the possibility of error, particularly in a new venture. Do you really think that they would go into this without...business plans with a high margin built in. I have been reminded repeatedly by wiser heads than mine on this thread that Intel's stated goal is to maximize gross margin DOLLARS. That means return is secondary to growth. I believe this is a correct strategy within reason, since with a 57% gross margin and a 35%+ ROE, it's tough for many new businesses to hit this hurtle rate. I have been asking myself what Intel core competency is really addressed with these data centers. You point out some (What Intel is good at is in process engineering.) But having the capital to invest in these centers may be a more important one than the thread has taken note of yet (to wit: what they do better is make money) In this sense Intel's investment in datacenters may be akin to GE's Capital Management arm. As long as the datacenters match the return of alternate investments (buying back shares for example) they are a good investment. HL