Impact of Intel's Stock Puts Industry in Quandry

Technology stocks took a nosedive in the spring, and sales of PCs across Europe are down. Now, Intel's 3rd quarter earnings are reported to be much lower than anticipated, thanks to the sluggish European market.

What in the world can a technology giant like Intel do to come out smelling like a rose?

Resurrect yourself by starting over, say analysts. In Intel's case, the company plans to make a dramatic departure away from the manufacturing of chips and components for PCs and into parts for many other devices, such as handheld organizers, computer servers and cell phones--where the market is somewhat more stable.

Still, the process is going to take time; 80 percent of Intel's revenues are derived from chip sales in the PC area. Getting away from this will take time, both in terms of development and impact on the marketplace.

Intel is not alone, either, in figuring out a different approach to doing business. Other companies, including Microsoft and Dell, decided some time back to begin delivering product and services solutions rather than just concentrating on software and hardware.

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