Zeev:
I agree,... it IS a rare thing when we disagree, but that's what makes the markets so fascinating.
More power to you on this one. I noted your excellent technical comments on it the other night on another thread, and I also noted that it behaved precisely the way you called it the following morning. Good job.
I'm a pure fundamentalist and simply cannot see how they can make any consequential dough. Even if sales of their technology were huge (and that doesn't show up on my radar scope), they still must live and die on the royalties. Rare is the company that has made this work in the past, even when a company had something of consequential value (ways are usually found to wiggle or weasle off the royalty hook). This is especially to be expected, given the relative sizes and strengths of the two "partners", as well as the total dependency of Rambus on Intel.
The SEC submissions, while they do not tell all, do provide some guidance as to the contractual arrangements. There appears to be plenty of room for Intel to slide around the situation.
From my perspective, Rambus will sell very poorly in the PC arena, simply because it only functions well with high end micros (and the sales action is at the low end), and it is too expensive to build. Nor do I see how the company can bring these costs down on a comparative basis. DDR, (which has creamed Rambus in independent lab tests) is the near term system of choice by the guys who have to make them (except for Samsung, who took no chances and produce both).
Another problem. If no other competitors choose to compete with Samsung (and it is unlikely that they will, their attitudes being, "Why gear up to compete with a tough guy for a tiny market?"), then Samsung will be in a position to "stick it" to Intel as a "single source" situation (which accounts for Intel's expensive and unsuccessful attempt to bring in more players). Intel has got to be worried sick over this situation.
For me, it comes down to the fact that Intel tried to re-establish the monopoly they formerly enjoyed by trying to establish a new two-product monopoly (Intel micro plus Intel-controlled Rambus memory). It didn't work out. They can't afford to stay with this situation much longer because the Athlon is making INTC's life miserable and the PC world is moving on.
If you read Intel's comments in their recent "road map", conference, they came as close as they dare, to admitting that Rambus is, a best, a narrow niche situation. Those comments were "damn with faint praise" if ever I have heard it.
As I pointed out a few months ago, and as mb underlined yesterday, Intel is in this for the stock play. They will likely say sayonara as soon as that situation is consummated .............or turns sour.
As for the Sony situation, Rambus will not make any consequential dough here. It was a "must have" contract, and the royalties will be "thin" to say the least.
best, Earlie |
