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Technology Stocks : ADSP - Ariel

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To: Anthony@Pacific who wrote (2252)	2/8/2002 1:11:58 AM
From: Bilow	Read Replies (1) of 2263

Hi A@P; I say the bubble is over, what we have now is the pop. In fact, I think that CSCO only dropping to $2 is rather bullish. The problem they have is that their market is running through a massive "integration contraction". That's a phrase I use for the what happens when the cost of building a product drops through the floor in an industry. The result is that prices for products drop through the floor. This increases unit sales, but not by nearly enough to account for the decreased unit price. The result is that suddenly the total income going into the industry contracts. This is particularly hard on the industry leaders, as these companies typically avoid putting out the extreme low price products because of fear of a price war. The end result will be CSCO's bankruptcy. Maybe 3 years from now. Take a look at what happened to the supercomputer companies back when it suddenly became possible to integrate a super computer CPU on a chip. Just about every one of them went TU. -- Carl P.S. Cray: (Note that the company known as "Cray" has essentially nothing to do with the original Cray, but instead apparently bought the name for advertising purposes.) cnn.com CDC: digitalcentury.com DEC: Digital Equipment Corporation is one of the few original manufacturers to have survived the early years in the computer industry. The company has suffered the ups and downs that have plagued this high-growth industry to become one of the most recognizable names in computer manufacturing. In 1998, Digital Equipment announced that it was being sold to the Compaq Computer Corporation for $9.6 billion, thus ending its long, strange economic journey of ebbs, flows and surges. digitalcentury.com Silicon Graphics: finance.yahoo.com The only reason IBM survived the transition to PCs was that they had a lot of other businesses. CSCO is too concentrated to survive.

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