Kendall,
Keep in mind that neither Diamond Multimedia nor S3 have ever exemplified the type of management acumen that is likely to lead to anything other than sub-par returns going forward. Mr. Schroeder, who appears likely to continue in some capacity in the combined company, presided over Diamond's decline to a company a third of Diamond's size just three years ago. Needless to say, shareholders that were hoping Diamond was a diamond in the rough have been sorely disappointed by Diamond's consistent failure to emerge from management paralysis and operational miscues.
The Rio has not been the incredible commercial success that Diamond management promised. The simple fact of the matter is that in banking the company's future on this Internet appliance, Diamond decided to take on the recording industry and numerous large consumer electronics firms several times Diamond's size. Diamond had a lead from a technological point of view, for about 2 months. MP3 players are now becoming as ubiquitous as most other consumer electronics products. Moreover, despite numerous claims to the contrary, the copyright issue has been a significant obstacle to the Rio and will continue to pose a problem.
The problem that continues to haunt Diamond is that its entire product line is commoditized shortly after product introduction. In this segment, life cycles are short, margins are low, and product differentiation is virtually non-existent.
Do yourself a favor and look elsewhere.
Jonathan |
