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

To: GVTucker who wrote (81936)	5/28/1999 1:07:00 PM
From: John Hull	Respond to of 186894

Yes, you and the others are correct. No price move, not due to competitive absence, but at the request of our OEMs who felt our large price moves late in the holiday season created a real problem for them in trying to stock store shelves. The issue being: it takes weeks to get store shelves stocked in Sept-Oct, then a price cut would come in November and make it hard to sell the inventory at a profit. So the OEMs used to do things like have inventory bleed down to zero right at the height of the selling season and then scramble like mad to try to restock with new lower-priced inventory before they missed the holiday window. As it turned out - the lack of a price move really didn't help much - the OEMs cut pices on their boxes to try to gain MSS anyway and the higher ASPs may have lead to market elasticity contraction in the subsequent quarters so we gave up on that approach. Really, the right thing to do is very frequent smaller moves. But this has problems too as all our channels are not the same and its tough for us to manage any kind of daily market pricing programs. Lastly, it was Prop. 211 - the proposal brought forth by Mr. Lerach and friends to try to circumvent federal legislation that made it tougher for people of his kind to sue companies. I spent a lot of time that quarter lobbying institutional investors to alert their clients to the risk presented by that legislation. As I remember that was the event that can most clearly be credited with "waking-up" Silicon Valley to the need to have political influence. It certainly made a big impact on Intel. Grove was one of the most vocal critics of prop 211 and Gordon Moore even wrote letters to our California stockholders urging a "no" vote. regards, jh