Hi richard surckla; Re the postponement of RDRAM by a quarter.
I have had only a small amount of exposure to marketing analysis, but that small exposure was in learning how important time to market was.
Since a given product only has a finite lifetime, and the end of that product's lifetime is constrained by external factors, typically, product sales are decreased when a product ships late.
Suppose that RDRAM is set for a product cycle of five to three years, or 20 to 12 quarters. Embedded DRAM will take market share away at a time of something like four years in the future, and this is assuming that the market isn't taken by DDR or VC DDR well before then. Losing one quarter would then lose 5% to 8% of the available time to sell the product.
But product sales generally ramp up at a constant rate from first delivery, so the total number of products shipped is proportional to about the square of the number of quarters shipped, all other things being equal. This means that 1Q slippage in RDRAM PC shipments will reduce the total number shipped by something like 10 to 16%.
In addition, profits on a product are concentrated in the first few quarters of shipment. After that, competition reduces profits. This extra factor means that the memory makers are looking to have their rambus profits reduced by something like 15 to 24%. This means that memory makers will be less likely to want to support RDRAM. In fact, I can here equipment orders being cancelled all over SE Asia, even as I sit here typing. (They work on Saturdays, sometimes.)
The reduced profits available to the memory makers will reduce the amount of royalties they will be willing to pay RMBS, look for renegotiations of that royalty figure to be talked about soon. This is particularly true since the delay allows for the introduction of cheaper alternatives to Rambus.
Looking at this from a business viewpoint, this fiasco has the possibility of snowballing into quite the disaster for RMBS. I know that the hype machines would like to bring the monster back to life, but if INTC has to delay Camino for a quarter, you can kiss RMBS goodbye.
-- Carl |
