Financial & Competitive Analysis of Intel Corp.

This research develops a financial and competitive analysis of Intel Corporation. An objective of this research is to develop information that will permit an assessment of the appropriateness of the market price of Intel common stock.

Intel Corporation, founded in 1968, is the world's market leader in the manufacture of microprocessors. The company's microprocessors�including the x86, MMX, and Pentium family�have been providing the brains for IBM-compatible personal computers since 1981. The company also makes computer micro-controllers, random access memory (RAM) cards, networking products (such as EtherExpress adapters, FastEthernet cards and servers), and conferencing equipment (such as the ProShareVideo System). Intel continues to expand and upgrade its products and facilities to maintain its dominance over rival chip makers such as Cyrix and Advanced Micro Devices�AMD (Intel Corporation, 1997).

Intel's fiscal 1996 sales exceeded $20.8 billion. The company's sales in 1996 represented a gain over 1995 sales levels of 28.7 percent, following an increase of 41 percent from 1994 to 1995. Intel employs approximately 45,000 people (Intel Corporation, 1997). Intel posted record net revenues in 1996, for the tenth consecutive year. Higher volumes of the rapidly growing Pentium microprocessor family, partially offset by lower processor prices and decreased revenues from sales of related board-level products, were responsible for most of the growth in revenues from 1995

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who produce processors for Unix platforms. Sun Microsystems is foremost among this group. Unix platforms, however, represent only five-percent of all microprocessor platforms. With the drive by Microsoft to place its Windows NT platform on a technological footing to challenge Unix, the threat of Sun Microsystems to Intel's market leadership is further compromised. Second, there are the microprocessor manufacturers who produce processors for the Apple Computers platforms and the Power PC platforms. Foremost among this group is Motorola, as IBM has all but dropped out of the competition. Apple Computers and Power PC represent only six-percent of all microprocessor platforms. Considering the dismal and floundering consumer and business market sales performance of these products, Motorola's threat to Intel appears to be fading. Third, there are the microprocessor manufacturers who produce processors for alternative PC platforms, such as Digital Equipment's Alpha. While these processors out perform the Intel processors, they are largely incompatible with most of the installed application base. Consequently, these manufacturers have a market share of only three-percent�not sufficient to pose any serious challenge to Intel. T

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