Conference nyoss1::market_investing

>	Neither Intel nor AMD combined can meet the demand for 486 chips.
>	There are 100 million Intel based PCs installed and only 10% have
>	486 chips in them. 

>	Anyone else have any views on Intel at this point?
    
    
    While I have been very impressed with Intel I disagree with the above
    statement because the following companies are all producing (and all will
    soon be selling) a 486 compatible chip:
    
    Intel
    AMD
    Cyrix (becoming very popular in Laptops)
    Texas Instruments (based on Cyrix design)
    IBM (Clock tripler)
    
    This should be enough competition to keep any one company from
    realizing an "earnings explosion".
    
    Wayne

    After running several benchmarks on Pentium, MIPS R4000SC, and
    Alpha PCs, and seeing Intel back down in the low 90's, I'm tempted
    to buy some.  .02 kb 

   If I had Intel stock I'd hold on to it real tight. It's going places.
   I think Intel was deliberately delaying Pentium releases pending the outcome
   of the AMD suit. Until the suit was settled, AMD cannot sell its 486 clones.
   Intel can continue selling massive quantities of 486's since all of it would
   be profits by now. Given DEC's slowness and ineptness in taking Intel 
   headon in markets where it can (upper-end PC's like Jensens and lower end
   workstations), Intel is biding its time for the release of Pentium.
   I think it has the production facilities all set up and ready to go but have
   no incentives now to kill their own 486 cash cow.
   
   Even when AMD starts selling its 486 clones, Intel would still market the
   Pentium as a higher end server chip, making oodles of money out of it.
   Its 486 market is not going to die all of a sudden given all the money
   they have poured into their "Intel Inside" campaign. I know I looked
   for this sign on the PC I bought given Cyrix and AMD selling their 386 chips
   as 486LC's or something.

   With the next quarter's report, Intel would again be trading high. Remember
   that Wallstreet makes money *ONLY* by changing their recommendations from
   Buy to Sell  and backwards as many times as they can. Each time they make 
   their commissions! 

   Nari

    re: .3
    
    .... but the market already knows all that, and has factored that in to
    INTC's price.  Why aren't -you- buying?
    
>   that Wallstreet makes money *ONLY* by changing their recommendations from
>   Buy to Sell  and backwards as many times as they can. Each time they make 
>   their commissions! 
    
    While it's true that brokers like to see lots of trades, it is patently
    NOT true that brokerages flip-flop their recommendations.  There is
    always a larger market for buyers of a stock as opposed to sellers,
    so you'll tend to see more buy recommendations than sells.  Plus, many
    companies grow leery of advisors who rate their stock "Sell"s, often
    refusing to deal with them.  If you follow XYZ but XYZ won't talk to
    you because you said "Sell XYZ", then you're going to have a hard time
    getting information on a company you're supposed to follow.  Hence, you
    tend not to give outright "Sell" recommendations.
    
    -------------
    
    ANY company that is trading at a high P/E multiple is subject to being
    trounced by the market when earnings fail to live up to expectations.
    INTC is no exception, as we shall see.
    
      John

> Hence, you tend not to give outright "Sell" recommendations.


Right, you get HOLD recommendations instead!  

    I heard on the news that intel was down another $6-7 today which pushes
    it into the $80s. 

   Re:.4

   >>> Why aren't you buying?

   Because my mutual funds are already heavily invested in it. I don't think
   they have changed their portfolios any. So I guess I own them indirectly.

   Anyone remember Digital trading in the thirties now that it's around 40's.
   If I remember right all it took was a couple of quarters. I guess 
   old-fashioned fundamentals are always good indicators.

   Nari

    Re: -1
    
    What are the fundamentals for Intel ?  What is the earnings history ?
    What is the current and historical P/E ?  What is the 52 week Hi/Lo ?
    What is the earnings growth rate ? vs. the P/E ?  
    
    If I recall correctly Intel had had a tremendous run in the last 6
    months from around $40 a share to over $100.  My memory could be wrong
    but it was one heck of a run.  The question is do the fundamentals
    support the current price ?  Time will tell.
    
    

  In my opinion the market is not looking at fundementals. Nor is it being very 
  rational. There seems to be much fear and uncertainty behind the will price
  swings. For example, Intel was down yesterday because of Motorolas 
  announcement about their new chip. But, Motorola was also down as was AMD!

  Intel performance for last 2 quarters

  FY92 Q4 Income doubles and Revenue was up 54%
	  Gross margins was 61% and net margin was 23%

  FY93 Q1 Income almost tripled and revenue was up 63%

  Their High was 121.25 and the Low was 46.5 

  Current P/E is 13

  If this isn't a buy indication I don't know what is. 

  Reiterate from .0:
  There are 100,000,000 PCs out there using Intel chips. 10% are 486s and
  needless to say almost none ar Pentiums.

  AMD has one (1) plant capable of making the 486. They are also still at risk
  of a patent suit from Intel because their AM486 is using Intels 486 microcode.
  That battle isn't over yet.

  Motorola's new chip PowerPC? which is supposed to battle Intel for the desktop
  market won't even be able to run WindowsNT! I don't really think to many 
  people will jump ship for Motorola from Intel.

  Finally if there is a price war in the 486 market, which seems inevitable,
  I don't think AMD or Cyrix have the financial depth to really do battle
  with Intel.

  I own Intel now and will likely buy more.

  I asked in .0 if Intel was a good buy at 96. It's even better at 87 3/8.

  This is exactly the situation that Peter Lynch talks about in his book.


  Pat 

>  I don't think AMD or Cyrix have the financial depth to really do battle
>  with Intel.

I wouldn't underestimate AMD.  They have a strong balance sheet (cash, low debt)
and they are also coming out with their own microcode version 486 chip.

John Piekos

I had heard that they were going to develop their own microcode. This is a very 
expensive proposition and will affect the cost of their AM486. Intel has already
made the investment and absorbed it a long time ago.

Let the price wars begin.

Pat

    Intel's estimated 1993 earnings are around $8/shr. At a p/e of 15 this
    stock could easily sell at $120/shr. 94 earnings could approach
    $10/shr ($150/shr?).
    A price war would only damage everybody except Intel. Even if Intel
    just stays as is the stock seems very cheap at these levels. 
    Just 2 cents worth.
    		Dan d

    
    A couple more bits of information:
    
    AMD was scheduled to come out with their own microcoded version of the
    486 in the June/July timeframe.  The granting of the appeal only buys
    them (AMD) an extra month or two.  
    
    Intel is ready to start pushing out Pentiums in volume, and no one can 
    match their production.  Once Pentium is in volume ramp,  486 will be
    old technology.
    
    Bruce  

  According to Andrew Grove, Intel's president and CEO Pentium isn't expected to
  add significantly to their profits until 1995. He considers the 486 to
  be the industries high volume mainstream processor. As a result they are
  doing a $1 Billion expansion of the New Mexico plant (1000 jobs). This plant
  will produce the Pentium and will also produce the next generation Pentium 
  called P6. In addition they are also looking for a home for a new plant 
  probably in California according to Gordon Moore Intel's chairman. 

  Pat

    > add significantly to their profits until 1995.
    
    From the pentium specs in trade rags is seems there are several
    performance bottle necks.  The biggest being global state bits
    which can hamper dual issue of instructions.  Intel admits it has
    an upper bound of 150 mips.
    
    I know marketing is more important than technical details to sell
    a product, but by 1995 a 150 mips processor may not cut it.
    
    Martin H.

    
    Does anyone know of mutual funds that are heavily invested in
    Intel? This may be an avenue for investing in Intel with some
    downside protection.
    
    RV

fidelity select electronics
vanguard specialized technology

both are sector funds..../mtb

dreyfus capital growth
financial dynamics
founders special
babson growth
boston company special growth
columbia growth
dreyfus growth opportunity
founders growth
gradison-mcdonald established value fund
harbor capital appreciation
primecap
warburg, pincus capital appreciation


all growth funds....per morningstar

/mtb

    The market has answered this one.  INTC closed at $113 today.
    
    Gim
    

>    The market has answered this one.  INTC closed at $113 today.
    
    The market is always right; one month ago I did not think INTC would
    recover so quickly.  That was wrong.  
    
    But Gim, what will you say if Intel drifts back to 80 in the next month?
    
      John

Based on what I'm seeing happening (everyone moving from workstations
to PC's at DEC and other companies), I doubt that that will happen.
Only unforeseen events can cause Intel to drop again.

Examples:
	- earthquake or acts of god destroys a major silicon plant,
	- CEO dies,
	- major bug discovered in Pentium,
	- non-Intel platforms sales increases because
	  of USL/NT,
	- US judicial system rewards the weak players and awards
	  treble damages to AMD.

All of the above have non-zero probabilities. You weigh that against
Intel's huge cash position and dominance in the industry.  



Gim

    
    BTW 
    
    Intel split 2 for 1 today. 
    Current price is 59.+- I just bought another 50. Wish I had more money.

    
    WSJ also announced that the judge in the AMD 386 ruling upheld Intel's
    appeal.  Intel can now sue AMD for it's profits on the 386.  As someone
    said, the ruling gives Intel more money than AMD has.
    
    Bruce

Attached is a long article on the internet decussing the demise of
Intel.

The author (unknown)  makes some excellent points, pro and con.
The author, however, did NOT consider the following:


1. Software vendors don't like to bundle floppies for many architectures.
   Would you make Quicken available  intel binaries, Alpah binaries,
   Mips binaries?

	- sure, CD's may fix that but that's not the
          main stream yet.

   Result: x86 applications win.

2. It's not clear that that Software vendors will charge the same for 
   non-intel platforms.  I can get Wordperfect really cheaper for
   Intel platforms. Try that for VAX/VMS.

   Result: x86 applications win.

3. Software emulation ain't there yet. Softpc doesn't run 386
   applications. WABI will support only a dozen or so applications.

   Result: x86 applications win.

4. Rick Spitz of Apple has confirmed the porting of Apple's Macintosh
   system for Intel 486.

   Result: x86 chip sales will incresase.
 
5. Intel has a slick "Intel Inside" marketing campaign.  Marketing
   has a great impact on sales of commodity products 

   Result: x86 chips sales (and not the clones) will win.

6. 100% compatibility - from what I can tell, customers do NOT want
   something that is almost like a pc. They want 100% compatibility.
   While killer applications such as Word, Excel, etc may work on
   non-Intel platforms, it's the second tier applications that will
   swing the decision. Running 90% of the applications won't hack it.


I have nice overhead from a Workstations presentation.  It shows the
decline of Intel platforms with RISC taking over.  The date: 1989.

Conclusion:  Intel will dominate for the next two years or so...



Gim

Article: 47705
Newsgroups: misc.invest,comp.sys.intel,comp.arch,comp.sys.dec,comp.sys.mips
From: angela@kithrup.com (Angela Marie Thomas)
Subject: Intel vs IBM+MIPS+DEC+Cyrix+AMD+Motorola+HP+Sun+TI+NEC+IDT+NexGen
Organization: Kithrup Enterprises, Ltd.
Date: Mon, 19 Jul 1993 06:46:04 GMT
 
 
I got the following through a convoluted path.  I thought it may be
of interest to the above groups, so here it is.  The author is unknown
and it isn't me, so don't thank me (or flame me) for the info.  I'm
just passing it on.
 
--
Angela Marie Thomas             Internet: angela@kithrup.com
 
Disclaimer:  !Kithrup's opinions, thoughts, beliefs, statements, etc.
             Heck, they aren't even mine.  O:-)
 
--Cut Here--
 
There has been a lot of talk on the net about Intel and the competition it
is about to face.  I have tried to collect what I see as the important
points in the following.  A one sentence summary is "The combination of
RISC chips for 1/10th the price of the Pentium and binary translators that
let the RISC chips outperform the Pentium on 486 code will prove
devastating to Intel."
 
 
Disclaimer:  
 
While this information is believed to be accurate, some of it comes from
the net and has not been verified.  Use at your own risk.  Post
corrections for any significant errors you find to misc.invest.
 
 
*************************** MY PREDICTIONS ***************************
 
Over the next 12 months MIPS/NEC/IDT and Motorola/IBM each sell millions
of chips.  The MIPS group will sell more than twice as many chips as Intel
sells Pentiums.  The Motorola group will just pass Pentium production.
DEC, HP, and SUN will all ship in numbers that are a sizable fractions of
the number of Pentium shipped.
 
People will complain that Intel is "Having production problems with the
Pentiums and not able to supply enough".  
 
IBM's x86 PC division will increase market share (as it has a cheaper
supply of fast chips).
 
Cyrix will do very well.
 
Acer and other companies making MIPS systems will have good sales (partly
because people can not get Pentium boxes).  Compaq and a few other PC
makers will announce MIPS based systems.  The portables and high end
machines will move away from x86.
 
The Pentium, MIPS, DEC, HP, Motorola, IBM, Cyrix, AMD and NexGen chips,
will cause demand for Intel's 486 chips to drop with prices following.
Note that in high tech just having some competing product announced can
cut into sales of current products (announced by competitors or the same
company - for example, Osborne Computers killed itself by announcing a
future product too soon).  Intel's bread and butter starts to evaporate.
 
Following DEC's example, other companies will come out with x86 binary
translators.  Over the next year MIPS, HP, Motorola, and SUN will each
come out with binary translators to go from x86 code to their systems.  
A year from now each of these companies (except Sun) will have systems 
that, after translation, run 486 code faster than any Intel systems. 
 
One year from now, while still selling lots of chips, Intel will be 
losing money.
 
****************************************************************************
 
HISTORY:
 
IBM decided to use Intel CPUs because they believed that between Intel and
the other companies that were second sourcing Intel's chips (like AMD)
there would be plenty of supply and the prices would be low.  Just in
case, IBM got the rights to make Intel compatible CPUs if it ever wanted
to.  Up through the 286 Intel had second sources for their chips.  The 
chips were cheap and plentiful.  But the 286 was the last chip where Intel 
did this.  Intel decided to go back on its second source policy (something 
AMD claims breaks at least one contract) and bet the company that customers 
were locked in enough that they would have to keep buying Intel CPUs.
 
For 5 years only Intel made 386 chips.  However in the 2 years after that
Intel lost almost all of the 386 market.  For 4 years only Intel made 486
chips.  For the last 9 months there have been various supply problems
(like an order in November for 486 66Mhz chips might have taken more than
3 months to ship).  Also prices have been rather high.  Now IBM, AMD, and
Cyrix all make 486 chips.  
 
 
GENERAL PROBLEM:
 
Intel has had such high profit margins lately that many companies are
attempting to get in on the action in one way or another. 
 
For the past 7 years Intel has always been at least 4 years ahead of its
competition as far as having the highest performance chip that runs
DOS/Windows software.  Intel does not have any lead as far as Windows NT
software (both MIPS and DEC systems are faster) and not much of a lead in
the x86 compatible CPUs.  IBM, Cyrix and NexGen should all have Pentium
level CPUs within 6 months.  
 
Within about 6 months there will be CPUs from MIPS that are about the
power of the Pentium at about 1/10th the cost and 1/10th the electricity
use (fantastic for portables).  Binary translators will make it possible
to convert software from x86 to other CPU types with little performance
hit (as opposed to the current x86 interpreters).  DEC has demo-ed such a
translator and I expect others will also have translators within 6 months.
 
Systems houses such as IBM, DEC, HP, SGI, SUN are all making their own
chips these days.  They all realize that, with todays technology, the 
best price/performance computers use microprocessors.  A microprocessor 
is no longer a thing that only a few places like Intel make.  
 
If Intel's prices go down, even if unit volumes stay just as high, their
profits will really be hurt (in that case a dollar less in sales price is
a dollar less in profits).
 
 
AGING COMPUTER ARCHITECTURES:
 
A computer architecture that starts out as being a very reasonable can end
up 15 years later not being so reasonable.  The DEC VAX and IBM mainframes
are some examples of this.  Shorter term ones are Sun's Sparc (register
windows turned out to be a really bad idea).
 
Intel's x86 architecture has a couple of real problems that are starting
to hurt.  There are only 8 registers.  Now this was fine for the 8080 more
than 15 years ago, but now 32 general registers is more reasonable.  Back
then it was necessary to have very few to get everything on one chip, but
not today.  If you have many places to store things it makes it much
easier to juggle several things at once (multiple functional units and
pipelining).  The x86 floating point architecture is stack oriented which
means that it is very hard to do several things at once (top of stack is a
terrible bottleneck).  There is good reason to believe that x86 is due to
go the way of the VAX and IBM mainframe any time now.
 
 
SOFTWARE IS MUCH MORE PORTABLE (Interpreters):
 
In the past only Intel's chips ran MS-DOS or Windows, or the thousands of
applications that run these that systems.   There is starting to be a
number of ways that people can run Windows/DOS applications on non-Intel
systems.  Windows NT comes with something that lets any chip interpret
Intel instructions.  This interpreting hurts performance but a MIPS or DEC
chip can interpret x86 code at low end 486 speeds (it really translates
code the first time through loops).  NT is supposed to be out by the end
of July.  It is known to work on DEC's alpha and the SGI/MIPS chips and we
have good reasons to believe that Motorola/IBM and HP will also be
supporting NT on their chips.
 
Sun (800) USE-SUN-X has a system called "WABI" that lets Windows programs
run on Unix systems.  They will be working with Novel so it runs on
machines using Novel's Unix as well as Sun's. 
 
Insignia Solutions (415) 694-7600 has a licensing agreement with Microsoft
that lets them support Windows on Unix or on the Mac.  Microsoft is using
Insignia Solutions software in Windows NT so that RISC CPUs can run x86
code.  Insignia has been selling "SoftPC" for awhile now.
 
Apple has software (demonstrated recently working for more than 100
applications) that lets Mac software run on a PowerPC based system with
very good net performance.
 
One common trick (used by Sun and Apple and Microsoft) is to have the
systems software recompiled for the new architecture (especially routines
for graphics) so that calls to the operating system are running at native
speed.  In windowing software it is common to spend about half the time in
the operating system, so getting the systems software in native mode
really helps.
 
 
PROFITABLE MONOPOLY PRICED PRODUCT LINES:
 
Current estimates are that Intel is shipping about 1.5 million 486 chips
per month and that that is where it is getting something like 60% of its
sales and 80% of its profits.  The Pentium production is around 10 to 20
thousand a month for the rest of this year.  So they are making about
1/100th as many Pentiums.  Even though it sells for about twice as much
($960 vs $500 for a 486) they are producing so few of them that it is not
going to help their bottom line anytime soon.
 
 
PEOPLE SWITCHING FROM 486 TO PENTIUM COSTS INTEL:
 
The 486 is far more profitable for Intel to produce than the Pentium.  The
Pentium is about 3.5 times the size of the 486.  This means that you get
much lower yields.  Current 486 yields are about 50% (net experts say).
If Pentium yields were as good per square centimeter as the 486 yields (they
are not yet this good) then the yield would be about 0.5^3.5 ~= 1/11 Since
the 486 yield is 1/2 this is about 5.5 times worse.  The fab line is
limited in the number of wafers it can make and the cost of chips like
this is really based on the number of wafers it takes.  With an estimate
of 1/5.5 the yield and 3.5 times the area Intel is getting something like
1/19th the number of good chips per month if making Pentiums.  So even
after initial production problems are solved, and even at twice the 486
price, Intel makes something like 10 times more money off a fab line
making 486 chips than Pentiums.  
 
Intel marketing has kept the price of the Pentium kind of low (compared to
where supply and demand would have it) in order not to look too bad when
compared to RISC chips.  However, this means that the Pentium cuts into
demand for 486 chips.  Also, since the price is sort of artificially low
there is a shortage (i.e. a long wait to get Pentium chips).  
 
So the RISC competition at the high end is already causing Intel problems.
 
 
COMPATIBLE CHIPS:
 
While in the past Intel had 4 or 5 years till there were compatible chips
of equal performance it seems their lead may be narrowed to 5 to 10 months.  
 
See "Multivendor 386/486 Market Burgeoning" in January 25 1993 issue of
Microprocessor Report.  Also see Byte December 1992, page 116 "Lab Tests:
Does Brand Matter?".
 
Cyrix, IBM, and AMD are now making 486 chips.  AMD is producing 486 chips
using a 0.7 micron process and though currently their fastest chips are 50
Mhz, they should not have trouble reaching Intel's top of the line 486 at
66 Mhz.
 
Destiny Computers 510-783-2727 has an IBM SLC2/66 Mhz motherboard for $499
and will have the SLC3/99 Mhz real soon.   Alaris/Asia Source Inc also has
this board (maybe cheaper) 510-226-8000, 713-782-8899, 214-238-8899,
404-246-9000.  Just a 66 Mhz chip from Intel is $500.  IBM (800) IBM-2-YOU 
was only selling up to 50 Mhz last I checked, but that may have changed by 
now.
 
There is supposed to be an IBM SLC3/75 Mhz out any day now that should be
a tad faster than Intel's fastest 486.  The 99 Mhz should be out within 3
months, and be well above Intel's 486.  The rumor is IBM will have 120 Mhz
by January.  IBM does have really good fab lines.
 
Cyrix is expected to come out within a month with a chip that is about as
powerful as Intel's top of the line 486 chip.  Around the end of the year
Cyrix should have something twice as powerful as the Pentium for 486
integer code (see May 31 EE Times page 10).  This new chip will not be as
optimized for floating point as the Pentium.  For integer code optimized
for the Pentium this chip should still be 50% faster. 
 
NexGen plans to have something as powerful as the Pentium and compatible
with x86 "soon".  This may be 1 month or maybe 5 months, don't know.  They
are at (408) 435-0202 but won't say much.
 
There are several others (I think Byte mentioned some in Taiwan and a
couple more in the US) and there is a good chance that there are some that
have not announced.
 
In the past (see Byte and Jan 25 Micro report) as compatible chips got up
to some performance level Intel had to drastically drop the prices of any
of its chips below that level.  One interesting graph in the Byte article
page 118 shows how the price of Intel's 486/25Mhz dropped from about $300
to $150 in the quarter that Cyrix started shipping its 486/33.
 
 
NEW CPU ARCHITECTURES:
 
For years the higher performance of RISC chips was irrelevant since they
could not run the PC software.  This is no longer true.
 
MIPS and friends are going after Intel's market with a vengeance.
There are at least 7 companies planning on making Windows NT PCs using
MIPS chips.  The existing chips are as fast to maybe 50% faster than the
Pentium.  They are shipping today (no 6 month waits).  The R4400 which is
about 50% faster sells for $690.  It seems people are and will be waiting
for a long time to get Pentium chips.  There are also some amazing MIPS
chips coming (see Microprocessor Report May 31 1993).  The first (from NEC
at only $70!!!) is really low power (2 watts vs Pentiums 16) and equal in
performance to the Pentium.  You can get info on this by calling 1-800 I
GO MIPS and with a touch tone phone asking the machine to FAX you
Documents No. 205 and 206.  You can also call James Mac Hale at MIPS at
415-390-4560. The other is about 30% faster (from IDT) and a bit more than
$70.  Since MIPS runs NT these can run all of the Intel software.  At $70
this is twice as fast as Intel's 486 which costs like $500 (Intel's bread
and butter).  These chips are smaller than the 486 and so very cheap to
make (like 1/10th to 1/20th the cost of the Pentium).
 
Motorola has said that its PowerPC chip will "run all major operating
systems" which means at least DOS and Windows and most probably the way
they will do this is with NT (and NT is probably a major operating system
in its own right).  PowerPC from Motorola/IBM is a bit more powerful than
the Pentium and about 1/2 the price (was 1/3 when announced).  When
Motorola announced the chip Intel's stock dropped about 10%.   There seems
to be some belief that it is not a threat to Intel because it does not yet
run NT.  However, it probably will soon.
 
DEC's first Alpha chip is twice as fast and at least 6 months ahead of
Intel's Pentium.  DEC plans to be coming out with a low cost version by
the end of this year and also a 300 Mhz version.  This runs NT.
 
HP is coming out with a low cost chip that has the right byte order to run
NT.  There are reliable rumors that HP is working on an NT port.  Also
forecast of very low cost HP-NT systems.
 
 
BINARY TRANSLATORS:
 
The x86 interpreters (as comes standard with NT) have a serious
performance hit.  Binary translators have much less of a performance hit.
The basic idea is to dis-assemble a binary, translate it to the new
assembly language, optimize that, then assemble that.  Once completed the
software has been ported to the new architecture without needing the
source code.
 
HP has a binary translator to move applications from their old
architecture to their new HP-PA architecture.  Since they are making NT
based systems using this new architecture they may also use their
translator technology to convert x86 to HP-PA.
 
Apple has a 68k to PowerPc binary translator that is said to be for sale
now (info from post by Eric Trent Hohnbaum ehohnbau@ics.uci.edu).  It's
supposed to give you roughly 80% of the performance of a native compile.
Not clear if this is taking into account a native toolkit or not.
 
DEC has 3 versions of binary translators.  One for translating from VAX to
Alpha, one for MIPS to Alpha, and one for x86 to Alpha.  It seems these
work on the vast majority of applications.  The performance hit is
minimal.  If you compile the SpecInt92 software for MIPS and then
translate it to Alpha it only runs 10% slower than if you had compiled it
for Alpha.  DEC demonstrated an x86 to Alpha binary translator at Spring
Comdex.  The Alpha has a very good chance of running x86 code faster than
the Pentium (probably even if optimized for the Pentium).  The new 300 Mhz
Alpha (December time frame) may give double or triple the Pentium
performance on 486 code (assuming translator is tuned by December).  At
least the first 2 translators DEC did were designed to be used by random
end-users, the x86 one probably is too.  DEC demo-ed their x86 to Alpha
translator at the spring Comdex (around 5/24/93) (info from post by Dileep
Bhandarkar bhandarkar@msbcs.enet.dec.com).  Even if it is not ready to
ship with their first release of NT (estimated to be a month after
Microsoft ships NT), DEC will be talking about it.  Also note that it does
not need to work on all programs - even if half the time it says "sorry,
use the emulator" it is still a win over no translator.  
 
Quorum (415) 323-3111 has a binary translator to take Mac programs and
convert them to run on Unix boxes (non-x86).  It does not seem to geared
toward the end user as much as DEC's is.   Microsoft is using Quorum to
port a number of their applications to Unix systems and then
distribute/support them.  Quorum calls their product an "applications
adapter".  As of 7/93 they say they have only qualified their software for
word and excel but plan to have the top 10 Mac applications tested by the
end of the year.  They are still developing their environment (still
having problems with programs that do not stick to the toolkit in proper
way).
 
Hunter Systems used to translate DOS applications to work on Unix machines
(XDOS).  They were about to do a Windows version and IBM was going to give
them funding and somehow things sort of folded or moved to England.  They
worked with vendors to port binaries, this was not an end user
binary-translator.
 
In order for a binary translator to work you need to be able to provide
the same operating system interface/environment on the new architecture.
This is the hardest part.  Because of this, Quorum and Hunter have more to
do than the others or what needs to be done for windows to Windows NT
(especially if NT's 16 bit windows emulator has some hooks in it).
 
 
PC MARKET IS VERY COMPETITIVE:
 
Margins in the PC market are not very good (ask DELL and Apple).  If PC
vendors can make systems using a $70 MIPS chip instead of a $950 Pentium
you can bet they will want to (if not DELL at least vendors like Compaq
who still realize that computers are a fast moving field).  If PC vendors
are having trouble getting Pentium chips (and they seem to be) there is
all the more reason for them to make RISC systems.
 
Intel has also pissed off a number of PC vendors both by not being able to
ship and by threatening them over using Cyrix or AMD parts. 
 
Compaq had promised to develop a MIPS based PC.  There was an "ACE"
agreement between Microsoft, MIPS, and Compaq to develop a new Windows NT
system.  Compaq fired their president and changed plans.  They said they
were told the Pentium was going to be out soon and be as fast as the MIPS
chips.  They have hinted that they may be reconsidering the idea of RISC
based systems.
 
The top 4 PC makers are IBM, Apple, Compaq, NEC.  Three of these are
coming out with RISC lines.  I think Olivetti, DEC, Acer, and HP are in
the 9th to 15th range and also brining out RISC lines.  All of them
together means that about half of the top 15 PC makers have already
announced plans to make RISC PCs.  Also, Workstation makers such as SGI,
Intergraph, Sun who have not really been in the PC market are now
targeting that market.  So the RISC attack is extensive, and about to
begin.
 
The June PC World reviewed 25 low cost 486 PCs and picked the top 5.  Two
of those were based on Cyrix chips - including the very top machine.  In
today's low cost PCs (like $1000 to $1,500) the difference of $100 in CPU
is significant.
 
 
PORTABLES:
 
In portables power is everything.  The 33 Mhz Intel 486 chips are showing
up in portables.  The reason why Intel 66 Mhz ones are not is that they
use 8 watts.  There are a few very small PC makers with 66 Mhz 486s but
they are not really meant to run on batteries, the problem is that that
one chip uses 8 watts.  There are a number of 50 Mhz 486 systems using
Cyrix or IBM chips use less power than the normal Intel 486s.  Intel has
recently modified its chips to take Cyrix approach to saving power. 
 
In portables they compare things like MIPS/watt.  Since Cyrix and IBM have
had an advantage in performance per watt they have been doing well in
portables.  The new NEC/MIPS chip has twice the performance of a 66 Mhz
486 and is only 1.5 watts, so its MIPS/watt type rating is about 10 times
that of Intel's 486.  This will really kill Intel in portables.
 
 
PDA/PEN BASED MARKETS:
 
In the PDA and Pen-based markets there is not much benefit to running
MS-DOS so there is not much need to use an Intel chip.  The big winners in
this area seem to be AT&T's hobbit and the ARM processor - though many
other chips are now targeting this market.  These are cheap low power
chips that are very fast.  
 
A pen-based computer that also has a keyboard (usually called a
"convertible") does have some advantage to using MS-DOS and so x86.  These
are selling.
 
 
WHAT IS COMING OUT OF INTEL NEXT:
 
See July 12 EE Times page 4.  A new version of the Pentium Processor, code
named the P54C is expected to start shipping in 1st or 2nd quarter of
1994, with systems showing up late 2nd to 3rd quarter of 1994.  The
processor will be built on a 0.6 micro process vs. the current 0.8 micron
process.  The smaller geometry will reduce power consumption, allow the
manufacturing of 3.3 V parts (at current speeds?), and production of 5 V
parts running at internally at 100 MHz and externally at speeds of 33MHZ
or 50MHz.  Intel may not have much Pentium volume till this fab line is up
to speed.
 
If there is a 6 month lead time on Pentiums, then you really need to
compare them to the other CPUs that you could buy 6 months from now when
deciding if you want to order one.  Given 300 Mhz chips and binary
translators coming out soon, a 6 month lead time on Pentium shipments
really hurts (long lead times in fast moving fields are just wrong).
There is probably more than a 6 month lead time on Pentiums at this point.
 
Fundamentally the problem Intel has gotten into is that the price of the
Pentium (like $850 for 60 Mhz) is less than a supply/demand curves would
have it be - so there is a shortage.  Given that the Power PC had been
announced at $375 and MIPS/DEC chips were much more powerful Intel would
look really bad if they charged $2,000/chip, but they probably could sell
all they could make at that price (at least for the next few months).
Cyrix, AMD, IBM, MIPS, HP, DEC etc are not going to under price their parts
so much and so will NOT have similar shortages.
 
 
MIPS IS A KILLER:
 
At a CPU price of $70, MIPS/NEC must be planning on selling millions of
chips.  The development costs (design and fab setup) on this chip was most
probably over over $100 mil.  Intel is said to have spent about $500 mil
on the Pentium - not sure how reliable that was - but I do know Intel is
spending around $2 bil to set up 2 fabs.
 
The very reason Intel got where it did is that it used to second source
its chips, making their chips attractive to IBM.  Today MIPS,
DEC/Mitsubishi, and Motorola/IBM each have this attraction but Intel
itself does not (and IBM has started making their own chips) (though
AMD/Cyrix sort of act like second sources for Intel).
 
Other companies such as DEC, Motorola or HP may have $70 chips coming too.
 
 
BUT UNIX CLAIMED SOFTWARE WAS PORTABLE TOO:
 
In the past Unix has claimed to make software portable between different
machine times.  The claim was that you "just need to recompile".  However,
since each vendor had their own Unix implementation, this never really
worked.  Applications had to be converted to run on the different Unix
types.  The total Unix market is about 2% the number of machines as the PC
market. However this was sliced up to Sun, HP, DEC, IBM, SGI, etc,  each
needing a software port.  This meant a lot of work and support for each
small slice of the market.  Even so, there is a fair amount of software
available.
 
Windows NT will come from Microsoft no matter what machine type it is to
run on.  Software will really "just recompile" for different machine
types.  The NT market is more or less expected to pass the size of the
Unix market within 12 months.  Porting an existing Windows application to
NT is said to be easy (trivial if it is a Win32 application).  Given how
easy it will be to support other machine types once an application works
on NT, software vendors will do so.   At the very least Microsoft will be
providing its software for x86/MIPS/DEC based machines, which is already
lots of software.
 
Users will probably be able to get "updates" for their existing x86
programs that come with MIPS/DEC binaries as well.  So if they have a $300
program and the upgrade cost, say $100, they can move it to a MIPS machine
for $100 (i.e. they don't need to pay full new price).  For most of their
applications binary translators will probably work, and for the rest the
emulator of windows NT is probably fast enough, but for the few
applications where performance really matters they can pay for an update.
 
Once the software takes off, there will be no question for a new user who
does not already own lots of x86 code.  If a user can buy the software he
wants for a machine that is about half the cost he will go that route.
Given that a the MIPS machine should be at least $1,000 cheaper (support 
is also cheaper since 40 Mhz external and the $70 MIPS CPU vs $950 Pentium) 
a user can justify the costs of a few software updates (they might even 
have been planning on getting updates anyway).
 
 
BUT PEOPLE TOOK YEARS LEAVE 386 for 486:
 
The first 486 systems, as shown in September 1989 Byte page 95, had prices
from $18,000 to $40,000.  Many of the computers advertised in that issue
were 286 systems.  The 386 systems had prices of $2,500 to $13,000.  So
the low end 486 was 7 times as expensive as the low end 386.  Given the
large price difference it makes sense that most people were not in a hurry
to switch to 486.
 
Today ALR (800) 257-1230 has a Pentium system for $2,500.  This is not really
that much above the price of even the cheap 468DX2/66 systems, about twice 
the cost.  Today almost nobody advertises 386 desktop system.  Given how much 
smaller the price differences are this time, a much large percentage of the 
people buying computers are going to want to buy ones with the new CPU.
 
Back when the 486 came out the prices were such that supply and demand met 
just fine.  However, today I think we have the makings of a massive 
Pentium shortage.
 
 
 
RUMORS:
 
Apple is ahead of schedule and so will be shipping PowerPCs in time for
X-mass sales (i.e. not wait for superbowl in Jan to be exactly 10 years
after Mac announcement as has been plan).
 
IBM will be shipping PowerPCs in Sept.
 
 
---------------------------------------------------------------------------
 
 
EVEN IF INTEL IS GOING TO LOSE MARKET SHARE IT WILL TAKE A LONG TIME
 
The timing is the hardest thing to predict, *for sure*.  
 
However, the price of x86 chips can go down even if only a small fraction
of the customers go to RISC.  The unit sales might not go down much at all
and Intel's high profits could still go down if the prices drop.
 
Remember, the new "RISC" architectures have done very well in the
mainframe, minicomputer, and workstation markets.  RISC has done so well
that in only about 7 years all architectures in these markets except for
IBMs AS400 seem to be well on their way out.
 
Up till now there has not been a RISC attack of the PC market.  However,
it now looks like SGI/MIPS/DEC/IBM/Apple/HP/Motorola/Sun/NEC/
IDT/Acer/Olivetti/Siemens are all about to attempt it.  A mainframe or
minicomputer user has a much bigger and more complex/customized bunch of
data/software to move over - so those moves were really more difficult
than a PC move.  Also, the technology developed to move minicomputer users
to RISC machines will make the PC move much quicker.  For good reason,
emulating IBMs VM/CMS was never attempted, while emulating Microsoft
Windows or the Mac toolkit is just not that hard (maybe by a factor of
100).  And, note that the profits on IBM mainframes went down much faster
than their market share went down (also very recently Apple has shown that
you can keep market share and yet lose lots of money very suddenly).
 
Sequent has seen their sales drop off rather sharply, probably because
their customers are waiting for their Pentium based systems.  However,
since this is sort of the minicomputer market (multiprocessors), this does
not have as much relevance to Intel chip sales as if DELL or Compaq were
to have this kind of problem.
 
 
-----------------------------------------------------------------------
 
In 1985 Intel broke even, and in 1986 Intel lost money.  So, in only 6 out
of the last 8 years Intel made a reasonable profit.  So, assuming the
future is like the past in a random sort of way, :-), there is reason
to predict a 25% chance of not making a profit next year.  :-) 
 
---------------------------------------------------------------------------
 
Intel is spending a fair amount of money on massively parallel processors
(MPP) machines.  With Cray coming out with an MPP machine using Alpha
chips it seems Intel may have a very hard time in this market.  The Alpha
floating point is very good.  Cray understands applications software for
supercomputers and has established supercomputer customers.  Thus the MPP
part of Intel could be a drain on profits.
 
---------------------------------------------------------------------------
 
Sales of Intel 386 seem to have stopped (Intel said Pentium sales are more).
 
---------------------------------------------------------------------------
 
POSSIBLE SHORT TERM EFFECTS:
 
Consumer and business confidence is down compared to end of last year so
people are probably ordering less PCs.  The backlog of orders has probably
been satisfied.  Thus we could see a "glut" of x86 CPUs.
 
Unit sales of i486 drop off a bit as people wait for Pentiums/NT/RISC.
 
People planning on upgrading to P24T (Pentium) just get cheap 486/33
systems (where Intel gets $200/CPU and not $500).  This is called "less
favorable product mix".
 
It may turn out to be true that most "Pentium-upgradable" systems are not
- see Electronic Buyers News, July 5th.  In that case people may not buy
so many 486 systems and just wait for Pentium systems.  This may not be a
big problem as a small fan mounted on the chip may solve it (if you can
get power for the fan).
 
Production of i486 down as some fab(s) move from 486 to Pentium.
 
IBM/Cyrix/AMD take another 10% of Intel's current 486 sales.
 
Prices of i486s drop.
 
MPP sales drop sharply (though only few % of Intel's sales it hurts
profits).
 
Higher capital expenditure as they rush to expand production capacity for
Pentiums without sacrificing current 486 production.
 
-------------------------------------------------------------------------
 
It takes around 3 years to get a fab line built and running.  They are
expensive (current ones are around $1 bil, though in the past they were
much cheaper).  Intel has only been really rich for the last 9 months.
They have not had time to take their really great profits and put them
into fabs.  As a result, their fabs are OK, but not really top notch.
Intel is currently using 0.8 micron, and switching to 0.6 next year.  IBM
(who had money 3 years ago and is only poor for the last 9 months or so)
already has 0.35 micron fabs.  NEC also has better fabs.  Better fabs mean
faster cheaper chips and higher volumes.
 
-------------------------------------------------------------------------
 
PowerPC 603 is supposed to be faster than the 601 and real cheap, like
$50.  Not sure exactly how long till it comes out.  MIPS has a $50 chip on
the way too.  DEC and HP are also coming out with low cost CPUs.  These
are probably all as powerful or more powerful than the Pentium.  With
binary translators it is not clear why anyone would pay more than $50 for
a CPU.  The current $950 price on a Pentium is not going to last, nor is
the $500 on 486.
 
-------------------------------------------------------------------------
 
 
>From Computer Reseller News p3(1) March 22 1993
 
HP plans a new line of low-cost, color workstations that will be capable
of running both Apple Macintosh and Windows applications. The new systems,
priced between $1,000 and $2,000, will compete with microcomputers based
on the INTEL 486 microprocessor. Third parties are reportedly working on
applications that will enable the systems to run Windows 3.1 natively;
Macintosh EMULATION products are also being developed. HP's systems will
be based on the company's Precision Architecture RISC 7100KLC
microprocessor, currently code-named Hummingbird, and will also be capable
of running applications designed for Sun Microsystems SPARCstations. The
HP PA-RISC architecture's advantage over the competition is its ability to
run multimedia instructions, which enables it to handle animation and
video, and provide superior multimedia performance.
 
 
---------------------------------------------------------------------------
 
>BusinessWeek 7/26/93 sales projections for 1997 are: 32M 486s, 20M Pentiums, 
>and 9M PPCs (Data Dataquest Corp).
 
Given that RISC chips and binary translators will be both cheaper (like
$50) and faster than 486 on 486 code, starting this year, there is just no
way Intel will still be selling 32 million 486s in 1997.   
 
The article also talks of earlier competition from Alpha and R4400 not even
being able to hurt 486 - this is just so bogus, the AlphaPC, R4400 PCs and
windows NT are not shipping yet.  This is future competition, not past.
 
-------------------------------------------------------------------------
 
 
****************************************************************************
POSSIBLE WAYS INTEL MIGHT BE A FINE INVESTMENT:
(a look at some opposing opinions)
****************************************************************************
 
Intel's stock price already reflects an expectation that earnings will not
stay at the recent high levels.  This is shown in the relatively low P/E
ratio.  If you extrapolate the last 3 quarters you get about $5/share/year.  
With this assumption, and a stock price of $55, Intel's P/E is around 11.  
Given that the dow-jones P/E is about 24 now, this is very low.  A stock 
price of $55 would be ok with a P/E of 24 and earnings of $2.30/share/year.  
If earnings are not going below that, then Intel's stock is already low.  
This is probably the best argument in Intel's favor.  Note that last years 
total was about $2.50/share with almost half of that coming in the last 
quarter.  One problem with this is that semiconductor companies seem to have 
a sort of boom and bust about them so the P/E will look low during good times.
 
If improved yields allow Intel to up production of 486s as fast as prices
go down they could keep up the total sales.  For example, if yields go
from 50% to 55% they would be making 10% more chips, and if prices dropped
less than 10% they would me making more money.
 
If yields of 66 Mhz 486s go up and users switch from cheaper 33 Mhz 486s
the average sales price for all 486s could go up even though the actual
prices for any given Mhz were going down.  The question is how fast do
yields of 66 Mhz chips go up and how fast do prices go down.  At some
point yield improvements will see a diminishing returns effect and price
drops will be more significant, though Intel might be able to switch to
another process by then.
 
If Intel came out with 100 Mhz 486 chips very soon (ahead of expected 1Q
94 time frame) they could do well. (It seems they need to switch to
smaller than 0.8 micron, and it seems that they had not been planning on
switching the 486 originally - only the Pentium. Switching to a new
process takes time).
 
Maybe Intel has a top-secret GaAs 400 Mhz 486 that they are about to
announce.  MIPS has made a GaAs version of their architecture (not as a
product) and the 486 has few enough transistors that a GaAs version might
work.  However, the 400 Mhz part would be hard, and without a reasonable
sized on-chip cache (very doubtful they could swing that) the real
performance would not be too impressive.  Also, it would not be cheap.
 
If the whole PC market has 40% growth in unit sales then even if others
take part of the market Intel could keep growing.  If they can keep their
average chip price up and have 20% unit growth they could be losing
market share and growing very fast.  Keeping the average chip price up is
the hard part.
 
Windows NT could have tons of bugs and cause everyone to hate it.  (Though
the beta reports make it seem not too bad).
 
Windows NT could be so big and slow that nobody wants it.  (Well, 12 MB is
not that much these days as there are now 8 MB chips, and SIMMs are costing
about $25/MB. Also, reports are that with NT screen I/O is 30% faster and
disk is far faster.  Since all interfaces/copies are done 32 bits at a
time, instead of 16 bits at a time, it makes sense that the OS should be
much faster.)
 
Intel could get legal action stopping AMD and Cyrix.  However, the
courts seems to consistently rule that a company that has rights to Intel
patents can make and sell chips compatible with Intel's even if they did
not design them (Cyrix/SGS-Thomas or ULSI/HP).  So if ULSI designs a 387
and HP manufactures it and sells it to ULSI, then ULSI can sell it with no
trouble (see Electronic News June 21 1993 or also EE Times June 28 1993
for info on ULSI results in a rather high court set up to keep the supreme
court from having to deal with high tech legal issues).  Only real trouble
Intel has been able to give AMD is about copying their copyrighted
microcode - so AMD has redone the microcode.
 
Intel may get legal action to stop PC makers from shipping Microsoft
Windows or OS2 with systems using AMD/Cyrix/etc chips.  Intel is trying to
use the International Trade Commission to stop Twinhead (Taiwanese
company) from selling PCs with Windows pre-installed since Windows uses
the VM layout covered in some Intel patent.  This is bogus as Intel should
be suing Microsoft.  Microsoft sent a letter to the ITC saying they
thought that it was inappropriate for the ITC to take action on this as it
was not really a trade issue but a domestic patent dispute.  In the worst
case they ship the systems without Windows installed and Microsoft gives a
good price to people who show they have recently purchased a system from
Twinhead.
 
RISC really works better with cheap DRAM.  Code can take nearly twice the
memory as in a CISC (you need more DRAM to rum Windows NT on a RISC
system, like 16 MB vs 12 MB).  By claiming "dumping", Intel got the
government to take action that has kept DRAM prices from dropping much
over the last 7 years (went up then is now a bit below - but nothing like
the factor of 2 every 1.5 years that there used to be).  However, as more
and more DRAMs are produced outside Japan and as more PCs are produced
outside the US, the US/Japanese government controls on DRAM will stop
working.  Note that PC makers outside the USA have a big competitive
advantage over USA based ones at this point, thanks to Intel.  Since DRAM
in the USA is really way overpriced at this point, it is more apt to take
a major drop than to go up or stay at these levels.  Still, at todays high
prices the extra 4 MB for the RISC system is about $100, which is not much
compared to the CPU price differences.
 
FLASH is an important emerging technology and Intel is leading in this
market.  Though still small, it could become a very large market very
soon.  One problem with this that battery backed up DRAM could be more
cost effective if DRAM drops like I think it will.  Also, Intel had
serious production problems and this has made it easier for others to
enter the market.  Also, Intel is in patent disputes with Rohm over FLASH.
Intel seems to be violating Rohm's patents and so may not have rights to
make FLASH chips. 
 
Intel could get legal action claiming that NEC's $70 R4200 CPUs is
"dumping" so that the government stops NEC from competing inside the USA.
However, there is a big market outside the US and MIPS can get other
companies inside the US to make the chip.
 
The danger of legal action is that the more Intel does the more chance
others have of getting an anti-trust "restraint of trade" suit against
Intel to stick.  Cyrix has had such a suit in progress since Dec 1990.
Not sure, but AMD is probably working this angle too.
 
Maybe the P6 is much better than the Pentium and can be out within a year.
The year part is the trick.  Also, it is probably twice as many
transistors, so yields will be even more of a problem.

    I disagree with point Hom5 -- "Intel Inside" campaign.
    
    The 1980s were a good decade for brand names and specialty retailers.
    The 1990s will be a decade for the cost-conscious, where advertising
    will not create markets.  Low price, almost exclusively, will dominate.
    With companies downsizing left and right and unemployment about to
    edge up, it is no time for comparing features and quality.  Just price.
    IMHO of course.
    
      John

Re: .25 

>     The 1980s were a good decade for brand names and specialty retailers.
>     The 1990s will be a decade for the cost-conscious, where advertising
>     will not create markets.  Low price, almost exclusively, will dominate.
>     With companies downsizing left and right and unemployment about to
>     edge up, it is no time for comparing features and quality.  Just price.

Price and full compatibility with the 50,000 applications out there.

Intel stock hit a hi of 68 and change. It seems to
have survived:

	- the US Court system,
	- AMD
	- MIPS and the ACE consortium
	- Cyrix
	- Alpha
	- Motorola PowerPC.

Aside from making money by selling Intel chips, Intel's Treasury
department is also making money by selling PUT warrants. This company seems
to be doing everything right. 

SUBJECT: Intel 1992 Annual Report                                  

DATE:8/25/93
SOURCE: Dialog file 541
COMMENTS:

PUT WARRANTS


In a series of private placements in 1991 and 1992, the Company sold put
warrants that entitle the holder of each warrant to sell one share of
Common Stock to the Company, at a specified price, if the holder
exercises the warrant.  Activity during these years is summarized as
follows:

                        Cumulative
                         Proceeds        Put Warrants Outstanding
                        Received         Number          Potential
(In thousands)           (Paid)        of Warrants       Obligation

December 29, 1990            --                --              --
Sales                   $14,219             3,500        $140,000

December 28, 1991        14,219             3,500         140,000
Sales                    42,235             7,000         372,750
Repurchases                (650)           (2,600)       (104,000)
Expirations                  --              (900)        (36,000)

December 26, 1992       $55,804             7,000        $372,750

The amount related to the Company's potential buyback obligation has
been removed from Stockholders' Equity and recorded as Put Warrants.
The 7 million put warrants outstanding at December 26, 1992 expire on
various dates between March 1993 and May 1994 and have exercise prices
ranging from $46.00 to $65.00.  At the prevailing market prices for the
Company's Common Stock, there was no dilutive effect on earnings per
share in 1991 or 1992.

On April 22 Intel was selling for $96. In the beginning of June they split 2 for
1. 

So if you bought at 96. Then they split and are currently at $73, you're up $50.

	cost	1 share  @ $96	= 96
	split	2 shares @ $45	= 96
	Current 2 shares @ $73  = 146
	profit                  = $50

Not a bad return since April 22.

    
    AMD also admitted that their supposed "clean room version" of the 486
    was "contaminated" by their 386 engineers.  Apparently the guys
    desinging the new 486 were given access to the 386 microcode, which
    means it isn't a pure AMD design, and uses Intel patents.  
    
    Intel will also be announcing the site for their next factory this
    month.  This one will come on-line around 1995 or so.
    
    Bruce  

	The AMD situation is a classic example of how a company tried to
	immitate (follow) rather than inovate (lead). Eventually the
	immitators have nowhere to go until someone else comes up with
	a new idea.

	re: .28 Te 486 engineers were given the microcode by top management
	
	How foolish.

INTEL PLUNGES AS EARNINGS DISAPPOINT
[Reprinted without permission from the International Herald Tribune Oct 12'93]

Santa CLara, CA -- Intel Corp. reported record 3rd quarter sales, net 
profit and new orders on Monday, yet its shares plummeted as investors 
viewed the results as a disappointment.

Intel reported profit of $584.4 million, or $1.33 a share, more than double
the year-earlier $240.7 million, or $0.56 a share.  Sales jumped 57%
to $2.24 billion from $1.43 billion.  The company cited strong demand for 
its 486 series processors and a strong start from its new Pentium
processor.  Per-share numbers reflect the company's 2-for-1 stock
split on May 6.

Intel shares plunged $4.75 to $65.50 in heavy trading.  That shaved more
than $2 billion from the company's market value.  "We are inundated with
sell orders," said Raj Rajaratnam, an analyst with Needham & Co.  
"Anything less than $1.40 a share was seen as a disappointment."

Fueling the decline in Intel's shares were comments from the company
that did not signal very robust growth in the 4th quarter, traditionally
the company's strongest period.
...

> Intel shares plunged $4.75 to $65.50 in heavy trading.  That shaved more
> than $2 billion from the company's market value.  "We are inundated with

My rough calculation tells me that if this statement is true, then, Intel is a 
$28 Billion company (this is after they loose the $4.75/share). Am I missing 
something?

	Re. .31

	> Am I missing something?

	No! Intel has over 400 mil shares outstanding (thanx to the recent
	2-for-1 split). 

From: clarinews@clarinet.com (UPI)
Newsgroups:
clari.tw.computers,clari.biz.products,clari.local.sfbay,clari.biz.top
Subject: Semiconductor 'book-to-bill' ratio plunges
Keywords: computers, manufacturing, corporate products & services,
	corporate finance
Copyright: 1993 by UPI, R
Date: Tue, 12 Oct 93 15:06:10 PDT

	SAN JOSE, Calif. (UPI) -- The semiconductor industry's key measurement
of orders compared to shipments in the U.S. market plunged from 1.08 in
August to 1.01 in September, a trade group reported Tuesday.
	The announcement by the Semiconductor Industry Association, made
after the stock market closed, may indicate a much softer market for
computer chips than had been forecast and cause a major sell-off in
semiconductor stocks on Wednesday.
	The ``book-to-bill'' ratio of 1.01 means that for every $100 worth of
products shipped (billed), manufacturers received $101 worth of new
orders (bookings).
	Trade group spokesman Tom Beerman said the orders in July and August
may have been artificially inflated by a July 4 fire at a key Sumitomo
Corp. chemical plant in Japan that created uncertainty about supply.
	Analysts have been expecting orders to fall, given that there were
cancellations of orders as concerns about the chip supply eased.
	Beerman also noted that late summer and early fall have tended to see
ordering fall off with pick-ups coming in October and November and
continuing through the start of the year.
	Orders in September, based on a three-month moving average, were $2.
161 billion, down 4 percent from the $2.25 billion recorded in August.
September bookings were 28.7 percent higher than in September 1992.
	Semiconductor shipments in September, based on a three-month moving
average, were $2.132 billion, up 2 percent from the $2.091 billion
recorded last month. Shipments were up 35.5 percent from September 1992.
	Actual shipments in September were $2.501 billion, a increase of 22.6
percent from the $2.04 billion billed in August.
	September marks the 23rd consecutive month that the ``book-to-bill''
ratio has been at 1.0 or better, the longest such string since 1980. A
ratio above 1.0 indicates the semiconductor market is expanding.
	The book-to-bill ratio has been falling for most of this year, since
reaching 1.20 in January, hitting 1.19 in February, 1.17 in March, 1.16
in April, 1.13 in May and 1.11 in June before edging up to 1.12 in July.
	The trade group has predicted that the worldwide semiconductor
industry is expected to grow 20 percent this year to $71.9 billion by
the end of this year, led by the North American market, which will see a
28.1 percent gain in 1993 shipments to $23.6 billion.
	New orders for semiconductors in the U.S. market have topped $2
billion in all nine months this year. January was the first time the
mark had been topped.
	During that time, orders have jumped due to strong demand for
personal computers with a ferocious price war among companies boosting
the need for chips to power the machines. But the price-cutting has
abated slightly in recent months.
	The trade group has also predicted that by 1996, semiconductor
shipments in the North American market are expected to be $31.2 billion
annually.

    From the November issue of Smart Money, pg. 56:
    
    "Intel will be a great investment throughout this decade.  
    "Intel has a virtual monopoly on chips....In fact, the best way for
    a computer company to market its wares is to feature the "Intel Inside"
    label...
    "Intel has a hammerlock on the personal computer industry.  They can
    raise their prices at will - and the momemnt any company issues a
    competitive offering, it slashes prices and immediately ships a higher
    priced iteraration...
    "And it uses its cash hoard to lord it over its competitors in a way
    that discourages future competition.  Even Motorola, with its much-
    ballyhooed Power PC chip, and Digital Equipment, with its Alpa Chip,
    seem like fleas on the elephant's back."
    
    Any comments on buying Intel now?  And what's the latest price?
    
    
    

    News from Comdex is Apple has Mac/Dos emulation chip.
    How big it will go over - who knows ?
    How much will it cost   - who knows ?
    Meanwhile INTL down 2 on the day.
    Stay tuned to official info from Intel later this week.
    Brokers advising selling today .
    

    Bob,
    	You must remember that Intel split 2 for 1 in June.  The price at
    the time was around $90, making the adjusted price around $45.  At $58
    the stock is up $13 or 29% in just 6 months.
    
    Now whether you should buy now at $58 is another matter.
    
    Don

  Re.35

  >>>>
 If you liked it at $90, you must LOVE it at $58
  >>>>

 I think counting a 2-for-1 split, aren't you comparing 116$ to 90$?

 I think that Intel is NOT a trading stock. They compete as if they're in
 war and they don't seem to be making many mistakes. Yesterday's drop was
 due to Cyrix shipping a 486 clone. As I predicted a while ago, just as they
 did with the 386, they'd milk the 486 for all its worth. Then they'd
 start producing and shipping Pentiums at 486 prices real soon, leaving
 behind shameless backboneless clone makers. 

 I don't think Apple or PowerPCs are going to dethrone Intel anytime soon.
 Gartner group recently changed their prediction about the PC market levelling
 off. With millions of applications yet to be written in emerging
 economies in Asia and South America, PCs, workstations and client-server
 computing have just begun their upward-spike. This is more so since
 computing is within reach of all these economies given their exchange rates
 with the dollar. So Intel might just have begun. 

 Nari
 

According to NBR, Intel was down yesterday because Cyrix has started 
shipping their latest 486-equivalent chip (Cx486DRx2, aka M5 I think)
and its price/performance is considerably better.  Cyrix was up, to 25-1/4.

    I edited the basenote title slightly in order to change the amount of
    confusion over INTEL's price. Only history will tell if this helps.
    
      John (moderator inside)

Apple/IBM/Motorola did indeed have a very impressive technical exhibit at
comdex. Based on the Apple technical presentation, one would conclude that
the PowerPC is technically superior to Pentium and will win marketshare
in the long run. 

However, as you walked around the show, it became apparent that the
PowerPC, has very little chance to succeed.  The facts follows.

Fact 1: Apple made a very persuasive presentation on the technical
	superiority of PowerPC over pentium:
		- chip size is about 50% of the pentium in area,
		- performance is about 2x that of the pentium,
		- and as a result of the above, the chip should be
		  cheaper the pentium.

	HOWEVER, the new MAC's	will NOT be available  until mid-1994.
	Existing applications compiled on 68040 must run in emulation
	mode.

	Conclusion: Product is vaporwave (for now). As a result, Apple
	will have to price current product extremely low and customers
	who need higher performance will wait.	(Apple did announce
	an upgrade program for current system users - upgrade programs
	tend to be acts of desparation.) You also need new executables
	to take advantage of the performance.

Fact 2: IBM and Apple are the only two companies currently offering products
	based on the PowerPC.  Optimistically, the two may sell
	about 5 million units per  year during peak sales.  Most
	analysts project about 20-30 million units for pentium during
	the peak years.

	Conclusion: The amortization of fixed costs gives the
	advantage to Intel based on volume.

Fact 3: Most of the multimedia companies with exhibits at the show were
	developing products for Intel based platforms.

	Conclusion: Customers will have more options on Intel platforms.

Fact 4: Most of the software companies with exhibits at the show were are
	developing products for Intel/DOS/Windows platform.  In addition,
	the price for Apple products tend to be about 10-20% higher than
	x86 based products.

	Conclusion:  Intel based software will be less expensive.


Fact 5: There are MANY, MANY companies building PC's based on Intel
	cpu's. There is ONE company building PC's based on the
	PowerPC. (Two if you include IBM.)  Regardless of what
	the CEO's of Apple says, prices for MAC's with PowerPC will be
	higher than Intel based systems.

	Conclusion: If price is a key determinant (and it appears that
	it will be in the decade of the 90's), consumers will choose
	Intel.

Fact 6: Apple/PowerPC has the ability to run DOS/Windows programs
	at 486 speeds. This featuring is being provided by Insignia.
	However, emulation, while at 486 speeds, is available only
	for standard mode.  Enhanced mode won't be available until
	next year.  Also - the product, and it is a product, will
	cost about $400 (street price).

	Conclusion:  you buy a MAC/PPC for MAC - not for PC
 	emulation.

Fact 7: Most of the printer companies exhibiting at the show were
	displaying printers with both parrallel and serial port options.
	But, the serial port printers were more expensive.


On the negative side, the threat of PPC is causing Intel to drop its
prices.  As a result, its profit margins will continue to decline.  That
is the probable cause of the stock decline since Wall Street tend to
focus on short results. 

Gim

    
    I saw recently that Apple isn't going to be shipping PowerPC's until
    March 94.  That being the case, why would anyone buy a Mac during the
    next few months?  You would be buying in to obsolete technology, and
    the new sw products probably will come to a 68000-based Mac last(about
    the time they come to an Amiga).  I would say that this means even
    better market-share for Intel-based PC's in the very shrot term.  Also,
    Intel's newest fab in Ireland is about to come on line within the next
    month or so, further increasing the Pentium production, and lowering
    the cost.
    
    Given all that, I don't think the affect on Intel won't be seen for
    another year.
    
    Bruce    

    Yes, Apple would face a dearth of new customers if the 68000 line were
    to end four months from now.
    
    However, Apple states they will provide an upgrade path to the PowerPC
    for their current high-end machines (Quadra 610 and up).
    
    At Comdex, I'm told, the Microsoft Windows paradigm swamped the
    exhibit.
    
    Apple shareholders and employees obviously have high hopes for March.
    (And potential Apple customers might be seeing inventory clearance
    sales just before then.)

Intel down 5 1/2....some firms cut their rating.

	Intel quarterly results were announced last evening and were lower
	than expected (38% increase in revenue or profits - I forget). 
	Watch out if you have a holding. 

    Interesting stat: Intel has almost as much cash ($3.4b) on hand as
    DEC is worth ($3.9b market value @$30/sh).  Pentium (and our Alpha)
    sales should help close that gap by the end of the year. 

If it hits $96, then the stock will have doubled in two
years.

Two interesting tidbits:

1.  AMD just announced that its K5 (pentium competition) program
    has slipped.

2.  Intel's Treasury department sold Put warrants; got the stock
    put to them and the stock then rises above the put price.
    What a winning streak. From the '94 annual report:

    "During 1994, in connection with the exercise of 1.0 million put
     warrants, the Company repurchased and retired 1.0 million shares of
     Common Stock at a cost of $65 million (see "Stock repurchase
     program"


Gim

    Re .-1
    
    What's Intel's issued capital ??  What percentage of outstanding stock
    was repurchased using these means ?  
    
    Is there a limit in the US for transactions of this type ?
    
    
    Thanks,
    
    Peter.

.46> 2. Intel's Treasury department sold Put warrants; got the stock
.46>    put to them and the stock then rises above the put price.
.46>    What a winning streak. 
    
    I wonder if the S.E.C. will investigate. Not that Intel had any reason
    to do wrong, but ths sort of luck should always be checked out.
    
      John

re: .47 Here's the answer.

The Board increased this authorization to a maximum of 55 million shares
in July 1994.  During 1994, the Company repurchased and retired 10.9
million shares (7.3 million shares in 1993) at a cost of $658 million
($391 million in 1993).  The 1994 amounts include 1.0 million shares
repurchased for $65 million in connection with the exercise of put
warrants (see "Put warrants").  As of December 31, 1994, after reserving
shares to cover outstanding put warrants, 17.9 million shares remained
available under the repurchase authorization.

re: .48

The Intel Treasury department is staffed with rocket scientists and appears
to be knowledgeable with derivatives - unlike companies such as Proctor &
Gamble.  Therefore - I am not surprised at their success rate. It was
interesting to note a member of the Treasury group
was part of the team that publisheed Intel's analysis of the pentium flaw.

Gim

    
    It's about to split again.  Will it be a good deal at $96 the next time
    round?  8^)
    
    

 Intel - 2-for-1 stock split, dividend up from 3 to 4 cents/share, repurchase
	{The Wall Street Journal, 2-May-95, p. B6}
   The split will be for stockholders of record May 19.  Shares will be
 distributed June 16.  The board of directors voted a common stock repurchase
 program from 55 to 110 million shares.  On a post-split basis, about 53.3
 million shares of stock have been repurchased and 30.7 million shares remain
 available for repurchase, after reserving shares to cover outstanding put
 warrants.

Intel has 435 million shares outstanding.

Digital, for comparison, has a market value of $5-6 billion.

Gim

    > Is Intel worth $45 Billion?
    
      no, it's worth $48 billion!

	An analyst on PBS's Nightly Business Report was recommendeding
	buying computer stocks, and then mentioned Intel by name even
	in light of Intel hitting yet another new record high today (Thur).

ps: .53; ken, your last name sounds familiar, do I know you?

Today's (6/7/95) WSJ has an good article on Intel. It basically
states that INTC could become the world's most profitable company.

My unscientific observations of PC users moving over to Pentium
confirms that.

Gim

    I have once again changed the title of this note to reflect another
    2:1 split in Intel stock.
    
    It appears that nothing can prevent this company's stock price from
    continued huge advances year over year. At least, nothing conceivable.
    
      John

    
    	Even though the market was up ~40 pts at lunch time. Intel was down
    1.5 pts. Reports say that there Receivables (Monies Due) is larger then
    expected. So people aren't paying Intel on time. One of the receivables
    in the amount of ~470 million. Was converted into a loan. The company
    oweing the ~470 million is speculated to be Packard Bell. So the market
    is wondering is it just Packard Bell having problems paying bills. Or
    are other PC manufacturers late in paying intel?
    
    Ron

> So the market is wondering is it just Packard Bell having problems paying
> bills. Or are other PC manufacturers late in paying intel?

I think the generally weak balance sheet is a the reason... why should such a
quickly growing, highly profitable company have such a weak balance sheet?  Is
it badly managed?


- jeff

The latest issue of Forbes classifies Intel as a value stock.

The stock has a PE of 16, a earnings growth of 54% and 
revenue growth of 33% over the past ten years.

In addition, the number of shares outstanding has been
declining with the stock buy back.

Gim

	I don't know the classification, but I do know the stock got upgraded
	late last week and it moved the stock positively, the same day I
	was considering unloading it and buying LSI Logic.  For now it looks
	like I'll hold my Intel ....

That's gonna leave a mark