I-Link Inc (ILNK), VoIP Telephony Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : I-Link Inc (ILNK), VoIP Telephony

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Paul K who wrote (378)	4/24/2000 11:05:00 PM
From: Paul K	Read Replies (1) of 417

ILNK: The Importance of Disruptive Technology and Lower Prices(3) by: Glotech (49/M) 4/24/00 5:52 am Msg: 26973 of 27072 I will share with you exactly what I mean. Let's consider the microprocessor-the heart of a computer. The leading company in this market is Intel. They've made a fortune-Intel's profits have been called the largest legal creation of wealth in history. How did they do it? By constantly lowering the consumer price of their microprocessors. Now AMD is using the same "price reduction" strategy and gaining market share to create wealth for its stockholders. In fact, according to measured computer processing speed, the past 30 years have seen nearly a 10-millionfold increase in the cost-effectiveness of computers. You've seen how fast computers change. Remember back in 1994 when the first Pentium computers were sold in the retail market? Today, just 5 years later, you can buy a computer that's 300% faster for 60% less money. That's the power of exponential growth made possible by "falling prices." Even though the Moore's Law [named after Gordon Moore-a co-worker of Andy Grove and predicts that the price of computing power would fall in half every 18 months] was discovered 25 years ago and is well-known in technology circles as being the force behind Intel's riches? Wall Street's economists don't understand it. These economists will tell you that a business with constantly falling prices is a bad business to invest in. Nevertheless, Intel and others have shown that falling prices are the secret to success of their industry. I'll show you why: Falling prices create a "positive feedback loop" that makes Intel's profits to continue growing. Falling prices mean that more and more people can afford computers. And a constantly growing computer market leads to more use of computers. Which leads to more demand for computer chips. Which leads to constantly rising sales and profits at Intel! So, no matter how ironic it seems, falling prices are the key to Intel's success. It seems crazy, to earn more by charging less-but that's exactly the secret key to American business success. Entrepreneurs throughout American history have exploited this hidden secret of capitalism. Standard oil made Rockefeller the first billionaire in American history by lowering the price of oil every year of its existence. For example, price of Kerosene fell from $70 dollars a barrel to $7! Constantly lowering your prices pressures the competition and draws more customers to your firm. It's what great companies always do. Consider Ford of yesteryears and his innovative way to making cars (prices for cars fell from over $2,000 to under $300) or Microsoft and its free browser. Companies that introduce new technologies at lower prices quickly dominate their markets. But Wall Street never notices the importance of lower prices. They don't get it. And so they also don't understand the importance of new technology that helps to deliver massive reductions in prices. These types of innovations are called "disruptive technologies." They are innovations whose main characteristic are massively lower prices. When you find disruptive technology, you know you've got an investment winner. continued...... Glotech

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next