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Technology Stocks : SI : microprocessor companies

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To: chuckles58 who wrote (2)5/1/2001 7:37:53 AM
From: Road Walker  Read Replies (1) of 9
 
CB and Maui,

I think some portion of this thread should be focused on end demand. Microprocessors are a cyclical business, and investors in microprocessor companies will make money in the strong cycles and lose in the weak cycles, regardless of which company they are invested in. That is the primary factor in investor profit or loss, not competition between the companies.

So a couple of random notes and thoughts:

- In the Intel analyst meeting last week, they characterized demand as "bumping along the bottom". Channel demand had changed to a turns environment, where orders were for immediate shipment. Reports from Taiwan MB folks and DRAM prices do not confirm a bottom.

- Windows XP could very well help create the next upgrade cycle. Some analysts have claimed that it has been delayed past July shipment, which would mean it won't be in PC's for one of the important buying seasons, back to school. I remember shopping for a PC just before Windows 98 came out, and the store shelves were bare. The retailer didn't want to stock PC's that would be out-of-date in three weeks. I imagine the same would be true for corporate, "might as well wait for the new OS, rather than buy a PC that you will have to upgrade". In fact this mentality may be part of the problem right now. At any rate, I see one swoon in demand prior to a spike after the release of W-XP.

- I read somewhere that the corporate upgrade cycle kicks in every three years, and that because of the Y2K upgrade cycle, corporate PC's will start to be replaced in 2002.

My personal opinion. The folks that say today's PC's are fast enough are not very good students of history. A 500 MHz might not seem very slow today, when the fastest computers are 1.5 GHz to 1.7 GHz. But when the fastest PC's are 2.5 GHz or 3GHz or 4 GHz, those 500 MHz machines will seem VERY slow. My point is that everything is relative, and a good way to look at it is that existing PC's are not standing still, they are getting slower everyday.

Maui, thanks for starting the thread. It will be interesting to see if we can take the vast collective smarts on the AMD and Intel threads, and without the competitive BS, create real investment value with a pooling of knowledge and opinion.

John
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