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To: John F. Dowd who wrote (80460)	5/5/1999 10:17:00 PM
From: GP Kavanaugh	Respond to of 186894

I can't believe how excited I can get about a company this big. Some Dow Jones news: Review:Intel Moves Beyond Mfg As Lower PC Prices Slow Growth By Charles Bickers HONG KONG (Dow Jones)--Craig Barrett, chief executive of semiconductor giant Intel Corp. (INTC), completed a five-day Asian tour at the end of April with the confidence of someone who will find friends in every port. Technology companies are dominant and successful, especially those from the U.S., and few companies more so than Intel. And with Asia now the manufacturing hub of the personal-computer world, everyone wants to know Intel's moves. For years, Intel executives have conveyed the same message: Buy the best personal computer you can afford so you don't fall behind as technology charges ahead. With Intel focused on dominating the market for the highest-performance PC chips, the company benefits from PC sales of almost any kind. This year, the message is different: Barrett used his tour as a platform to underline Intel's shift from a pure manufacturing operation to a diversified communications and technology company, reports the latest edition of the Far Eastern Economic Review published Thursday. The fundamental drive behind that move is the reduced potential for earnings growth in PC-processor manufacturing. Although unit sales are still expanding, particularly in China and India, computer prices are just too low to maintain the company's profit growth. "If you look at Intel over the past decade it has grown at around 30% per year," Barrett says in an interview. "We're not going to grow at 35% or more - we're just too big." He says the company isn't abandoning its core business of making processors, which contributes about 80% of revenues and nearly 100% of profits. Instead, it's going to develop new or recently acquired operations centred on the Internet. "We intend to provide the building blocks for the Internet," says Barrett. Intel plans to develop three new areas: manufacture of communications-network equipment, provision of Internet services and creation of "server farms," a network of high-capacity data-storage facilities. The move into Internet services is Intel's biggest shift away from its chip-making roots. The company's joint venture with Pacific Century Group in Hong Kong, called Pacific Convergence Corp., will provide high-speed Internet services to Asia - in the process competing with telecommunications companies such as Hong Kong Telecommunications Ltd. (HKT). Sees Taiwan As Future Driver For PC-Based Devt While U.S. technology makers migrate to service industries in search of higher margins, Asian manufacturers are likely to benefit from more room for innovating in the PC business, says Barrett. He contends that for hardware, Taiwan is fast becoming the world's major design center for the PC industry. Already, most of the world's notebook computers are designed and built in Taiwan, and Barrett foresees the island moving on to higher-performance computers such as servers and workstations for advanced applications. Indeed, Barrett sees Taiwan not only as the future driver for PC-based development but also as home to some of the best business models for the technology industry. He has particular admiration for Taiwan Semiconductor Manufacturing Co. (TSM). TSMC focuses solely on making chips, unlike Intel, which is involved in the entire design-to-sale process. Barrett wants Intel to occupy a similarly specific niche in the data-services industry, selling space and time on the server farms. One country Barrett doesn't see as offering much of a challenge in the computing sphere is Japan. "They're still capable of excellent engineering and they're creative in the consumer-electronics space, but they are not world leaders in computing," he says. "They just continue to find themselves in a difficult position." Despite recent announcements of restructuring, Barrett says none of Japan's major companies have undergone anything like the structural changes that most U.S. technology firms have. PCs To Remain Dominant Computing,Internet Access Tool For all the changes in Intel's business direction, Barrett is adamant that PCs will remain the dominant computing and Internet access tool. He dismisses the idea that mobile phones or organizers might make PCs redundant: "I hear all of this, and frankly our industry is full of hype." The most successful non-PC information devices to date are handheld organizers such as 3Com's Palm Pilot that complement the PC, he says. Intel is continuing to develop its StrongARM processor for just such devices. Those who predict the fall of the PC didn't bank on service providers giving them away for free, he adds. Already, stand-alone PCs are selling in the U.S. for under US$400; and, much as mobile phones are offered cheaply to lure new users into the wireless world, so too some Internet service providers in America are marketing free PCs to drum up customers. But for all his defence of the PC, Barrett is conscious of its shortcomings. After 20 years the personal computer is barely any easier to use - a fact that holds many back from venturing onto the Internet. "Eventually we will collectively get our act together and PCs will be easier to use," says Barrett. "There's no reason why PCs can't be run like TV sets." (END) DOW JONES NEWS 05-05-99 08:02 PM - - 08 02 PM EDT 05-05-99 GP

To: John F. Dowd who wrote (80460)	5/5/1999 10:20:00 PM
From: GP Kavanaugh	Read Replies (1) \| Respond to of 186894

Here's is something interesting too. Boy is Intel jumping into some new markets or what? Intel and Lernout & Hauspie to Form New Venture SANTA CLARA, Calif. and IEPER, Belgium--(BUSINESS WIRE)--May 5, 1999-- New Entity to Develop E-Commerce and Telephony Solutions Using L&H's Speech and Language Technologies; Intel Finalizes $30 Million Investment in L&H Intel Corporation (Nasdaq:INTC) and Lernout & Hauspie Speech Products (Nasdaq:LHSP, Easdaq:LHSP) (L&H(tm)) today announced that they have signed a definitive agreement to form a venture to develop e-commerce and telephony solutions using L&H's speech and language technologies. The new venture will combine many of L&H's speech and language technologies, such as L&H's Natural Language Technology(tm) (NLT), intelligent content management (ICM), machine translation and speech synthesis, such as L&H's recently announced RealSpeak(tm) technology, with Intel's expertise in performance computing platforms. The goal is to provide a new level of e-commerce and telephony solutions for users worldwide. "L&H has long recognized the integral role speech and language technologies play in simplifying and enhancing solutions for the Internet, e-commerce and telephony market segments," said Gaston Bastiaens, president and CEO of L&H. "Our complete offering of technologies and solutions support the industry's broadest range of languages and enable us to provide speech and language software and services to users in these market, and many others worldwide." "Combining Intel's leadership in the high performance, connected computing platforms together with L&H's leading technologies presents exciting possibilities for web-based products and services," said Ron Whittier, senior vice president and general manager of Intel's Content Group. "A voice interface presents a natural, intuitive method for people to get the information they need - via PCs, connected smart devices and the telephone." "The combined technologies of L&H and Intel can to make e-commerce and other applications more attractive by supporting natural speech commands, human-sounding synthesized speech, accurate machine translation and faster, simpler data query and retrieval," said Jo Lernout, co-founder of L&H. "We believe that this new venture with Intel builds upon our expertise and that these technologies will play a role in helping to further solutions for diverse industries." New Venture Agreement The venture will be owned 51 percent by Intel Corporation and 49 percent by L&H. Each company will have representation on the board of directors. The new company will be based in L&H's Flanders Valley facility in Ieper, Belgium and in Santa Clara, California and will be staffed initially by employees from both companies. Intel Investment Completed L&H announced on April 5, 1999, that Intel had signed a letter of intent to invest $30 million in L&H in the form of non-voting securities and non-interest bearing convertible into L&H common stock. Today, the companies announced that Intel had completed its investment. About Intel Intel, the world's largest chipmaker, is also a leading manufacturer of computer, networking and communications products. Additional information about Intel is available at www.intel.com/pressroom. About Lernout & Hauspie Lernout & Hauspie (L&H) is a global leader in advanced speech and language solutions for vertical markets, computers, automobiles, telecommunications, embedded products, consumer goods and the Internet. The company is making the speech user interface (SUI) the keystone of simple, convenient interaction between humans and technology, and is using advanced translation technology to break down language barriers. The company provides a wide range of offerings, including: customized solutions for corporations; core speech technologies marketed to OEMs; end user and retail applications for continuous speech products in horizontal and vertical markets; and document creation, human and machine translation services, Internet translation offerings, and linguistic tools. L&H's products and services originate in four basic areas: automatic speech recognition (ASR), text-to-speech (TTS), digital speech and music compression (SMC) and text-to-text (translation). For more information, please visit Lernout & Hauspie on the World Wide Web at www.lhsl.com. BayStar Capital, managed by Lawrence Goldfarb, acted as advisor to L&H on this transaction. This Press Release contains forward-looking information, including but not limited to statements involving the plans, expectations and intentions concerning the development and commercialization activities of joint venture. There can be no assurance that actual results will not be materially different than those anticipated in these forward-looking statements. Factors which could cause actual results to materially differ from those anticipated in these forward looking statements include known and unknown risks, including those set forth below. Joint ventures involve numerous risks, including difficulties associated with the assimilation of the joint venture partners' technology, conflicts of interest among the joint venture partners, and the ability of the joint venture partners to cooperate productively. In addition, the technologies and businesses of the Joint Venture are subject to the significant risks and uncertainties generally applicable to high technology start-up companies, including uncertainty of new product development, budget overruns, project delays, early stage of development of the targeted markets, uncertainty of market growth, rapid technological change and intense competition. As a result, there can be no assurance that the Joint Venture will be successful. L&H cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. L&H expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the L&H's expectations or any change in events, conditions or circumstance on which any such statement is based. All product names and trademarks mentioned herein are trademarks of L&H or their respective owners. CONTACT: Lernout & Hauspie Worldwide PR/IR: Ellen Spooren, (781) 203-5344 espooren@lhsl.com or Corporate Comm. US: Audrey Pobre, (781) 203-5341 apobre@lhsl.com or Media Contact Europe: Vanessa Richter, (32) 57-22-9518 vrichter@lhsl.com or Investor Contact Europe: Lommaert & Blondeel Consultants Annemieke Blondeel, (44) 1322-520-180 a.blondeel@dial.pipex.com or Intel Media Contact Europe: Mark Brailey, (49) 89 99143-500 or U.S. Media Contact: Robert Manetta, (408) 765-7082 20:06 EDT MAY 5, 1999 BW1597 MAY 05,1999 17:06 PACIFIC 20:06 EASTERN GP

To: John F. Dowd who wrote (80460)	5/5/1999 11:57:00 PM
From: Paul Engel	Read Replies (3) \| Respond to of 186894

John - Re: " If you don't think the server scheme they announced the other day isn't involved with some kind of storage " Maybe I don't have a good picture of what you mean, but it is my impression that Dell has two distinct programs going: 1. Large Enterprise RAID storage systems that they OEM and sell to their Server customers. 2. A new initiative aimed at providing a huge Search Engine utility for their customers. The second one makes use of storage but is a separate and distinct entity. Intel will be implementing large server farms which will use servers (of course) and whatever storage their customers require. These will be combined as hardware and software (along with routing/switching networks) for the purpose of supplying e-commerce capability to customers who do not have the expertise - or desire - to buy and establish and maintain their own web site/commerce centers. Paul