CONTACTS 

SUBJECTS
Industry Contacts
Proposal, Contract & Support, Intel, internal
Market Potential
Demand for Personal Computers Comes from
Productivity of Managers Not Improved by
Intel Earnings

1108 -    ..
1109 - Summary/Objective
1110 -
111001 - Follow up ref SDS 28 5593, ref SDS 27 7409.
111002 -
111003 - Reuter's Internet news service carried Intel report forecasting
111004 - drop in earnings for 1st quarter due to weaker than expected demand
111005 - from PC makers. ref OF 1 5298
111006 -
111007 - Intel forecast reduced earnings on 970617. ref SDS 14 8330, but for
111008 - the year its earnings improved.
111009 -
111010 -    [On 980307 purchased Andy Grove's book "Only the Paranoid Survive"
111011 -    ref SDS 32 4203]
111012 -
111013 -    [On 980313 news report drop in PC sales despite sharp reduction in
111014 -    prices below $1K. ref SDS 33 1331]
111015 -
111016 -    [On 980414 news report Intel earnings decline and layoff 3,000
111017 -    employees. ref SDS 34 3559]
111018 - ..
111019 - Intel said it now expected its first quarter revenue to be about
111020 - 10 percent below fourth quarter revenue of $6.5 billion and gross
111021 - profit margins in the range of 53 percent of revenue "plus or minus a
111022 - few points." ref OF 1 4730
111023 -
111024 - "The company still believes that over the long-term, the gross margin
111025 - percentage will be 50 percent plus or minus a few points," Intel said
111026 - in its statement. ref OF 1 6114
111027 -
111028 - "We are going to hear more of these pre-announcements as we go
111029 - forward, and I think that's going to lead to more volatility in the
111030 - month of March," said Marshall Acuff, portfolio strategist at Salomon
111031 - Smith Barney. ref OF 1 4005
111032 -
111033 -
111034 -
111035 -
1111 -
1112 -
1113 - Analysis
1114 -
111401 - Profit margins of 53 percent reflect effective management and
111402 - favorable market conditions.
111403 -
111404 - However, the reduction in demand reflects Dave Vannier's project last
111405 - summer to identify broader market demand for more processing power and
111406 - higher priced computers. ref SDS 14 1600
111407 -
111408 - Reduced demand may relate to purchase objectives being driven by
111409 - desire to improve productivity, and dawning awareness that PCs do not
111410 - accomplish this very well, as discussed on 950927. ref SDS 3 6493
111411 -
111412 - IBM's report on 980226 to sell "business intelligence" is a possible
111413 - rationale for higher prices PCs. ref SDS 30 1247, per discussion with
111414 - Dave on 970603. ref SDS 14 2701
111415 - ..
111416 - The general and pervasive market for for business intelligence
111417 - was expressed by Dave in our meeting on 970603, where he cited common
111418 - weakness in current management practice, ref SDS 14 5803,
111419 -
111420 - The scope of "business intelligence" i.e., what it means in contrast
111421 - to what IBM will offer, is encompassed by Dave's interview in Byte
111422 - magazine in 1991 in which he described the goal to use technology to
111423 - integrate common management practices. ref SDS 1 2744
111424 -
111425 - The frustrations of managers not being able to acquire technology that
111426 - delivers effective "business intelligence" is seen from Dave's report
111427 - in 1995 that his management practice had moved away from using
111428 - computers. ref SDS 3 7732
111429 -
111430 -
111431 -
111432 -