PAULY strikes back:

Forget apples to oranges Frank, comparing Intel to the railroads of old is like comparing apples to orangutans. Not only do the two industries have wildly different fundamentals, but you're comparing two completely different eras. Just because companies with dominant positions have failed in the past does not mean that dominant companies will always fail. Check your time machine, this is the 90s -- an era with an emerging global economy where intellectual capital is arguably more important than physical capital.

You say, "...Intel's near-term competition will, of course, come from companies in the same market." Intel has always had plenty of competitors, but it has been the most adept in its industry and always runs one step ahead of the pack. Companies are like people in that leaders are likely to remain leaders.

Even if 90% of all computer users use only email and chat, you could probably have said the same thing about word processing 10 years ago. The "killer application" companies that Intel is helping will certainly keep pushing the envelope of computer development. I have no idea what the next big use of the computer is going to be, but it's a safe bet that it's going to need more processing power, not less.

Furthermore, Intel is not acting like a company sitting in a monopolistic position. Monopolistic companies attempt to keep the status quo -- Intel is doing the polar opposite of that. Intel is its own best competitor. By always releasing faster chips, Intel's so-called monopolistic business is actually improving the world by constantly speeding up computers. Partly because of this fact, I don't think that the Department of Justice will touch the company. Intel is also a world leader, and I highly doubt the government would split up the company and give the Japanese, Germans, or Tunisians a crack at dethroning a product that is largely "Made in America."

I also find the set-top box and network computer theory to be unconvincing. Do you really think that people will settle for less than a PC? One need only look at the anemic sales of Web TV or any other assortment of half-donkeyed computer flops, such as IBM's PC Junior, to see what the future holds for these "dumb" computers.

The paradigm has shifted to the PC, and I don't think that it will shift back to centralized computing any time soon. Even if I give you the point that networked terminals are the next big thing, won't the servers still need processors? Sure, Intel may not make all the chips, but odds are that Intel will provide a majority.

No other company is as respected in this business, and deservedly so. Nothing is a given, but I like Intel's odds.

-- Paul Larson ([email protected])

NEXT: The Bear's Rebuttal