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

To: Amy J who wrote (81754)	5/27/1999 3:16:00 AM
From: Tenchusatsu	Read Replies (1) \| Respond to of 186894

<If I sold one loaf of bread today and two loaves tomorrow, would this impress you?> LOL! Tenchusatsu

To: Amy J who wrote (81754)	5/27/1999 8:11:00 AM
From: GVTucker	Read Replies (1) \| Respond to of 186894

Amy, RE: If I sold one loaf of bread today and two loaves tomorrow, would this impress you? :) I like that. It's a point I have made to more than a few people when they talk about the revenue growth of certain 'Net stocks. But there is a real issue out there for Intel, and it is related to the <$1K market. Looking at the earnings results from the box companies, two trends are evident. First, the consumer market is soaring, and all of the growth is in the sub $1K market. AMD's share has dropped slightly, and Celeron's share has been strong. Good for Intel. But the second trend is sharply slowing growth in the business desktop market. This is not just an invention of Pfeiffer as an excuse for CPQ's performance. In DELL's most recent quarter, business desktop sales growth were flat. Server sales need to rescue Intel in the business market, and have thus far. The rational bear argument (OK, I realize that is an oxymoron for a lot of you) is that server sales growth will slow, following the business desktop slowdown. Even the most optimistic of analysts realize this is a risk. Joe Osha, praised on this thread many times for his unKurlakian comments, noted in his morning meeting comments today that there are issues this quarter for Intel. He states, in part, "Intel is having to price the PIII aggressively in order to prevent product mix from shifting too quickly to lower-priced Celeron products." He goes on to say why he thinks the quarter is OK, concluding with, "So, all in all, it seems to us that the challenges that face Intel, though substantial, haven't changed in any meaningful way during the past few weeks, even though the stock price might suggest that they have." If a raging bull says this, it's pretty easy to imagine how a bear can twist things to sound very bad. The growing market share of sub $1K computers continues to be a risk to Intel's revenue growth. It is an issue that Intel has managed well since they were late to enter the game. Intel still must focus a lot of energy there, however, and the risk is as great as ever.