A number of analysts downgraded Diamond in the wake of the
announcement that the company would post a loss this quarter. As
noted in Mr. Schoeder's announcement, the company continues to
suffer from inventory control problems. Last year it was sound cards.
This year, it's Diamond Edge 3-D accelerator cards.
Diamond's customer service policies are amongst the worst in the
industry, as you'll note if you examine:
http.tamu.edu:8000/~jpq0042/complaint.html.
If you scan the Usenet using a search engine like Alta Vista, you'll
find similar results. Customers are dissatisifed with the level of
customer service Diamond Multimedia currently provides.
Diamond has problems developing drivers for new operating systems,
particularly Windows 95. Owners of the Diamond Viper line still do not
have an accelerated Windows 95 driver over a year after Windows 95
was released. Most of Diamond's competitors were ready with support
for Windows 95 on Microsoft's May '95 release date. Owners of the
Diamond Stealth have registered complaints concerning icon
corruption and random lines appearing in Netscape menus since
Diamond initiated serious development work for Win 95. End-users
continue to report problems with the 268 iteration of Diamond's GT
drivers for the Stealth.
More recently, Diamond released a $2000 professional 3-D accelerator
under the FireGL brand name and once again failed to provide working
drivers for Microsoft operating systems. Ziff-Davis personnel, when
called upon to actually install the FireGL in the Windows environment,
were unable to do so in a recent PC Magazine benchmark. Diamond
tech support had the gall to advise the team evaluating the FireGL
to rely upon drivers written in German! As a result of non-functioning
drivers and inept technical support, PC Magazine was unable to
recommend Diamond's FireGL.
Long-term, Diamond is poorly positioned in the 3-D industry and
completely unprepared for the advent of processors like Chromatic's
MPACT. In brief, the MPACT programmable RISC processor
peforms the functions of nearly every product in Diamond's product
line and is intended for direct integration into the PC motherboard.
The chip is currently in alpha testing with six motherboard
manufacturers and has a published release date of 3Q96.
For information on the MPACT processor, browse www.mpact.com.
For information on Diamond's positioning in the 3-D market, take
a look at:
cjnetworks.com.
Diamond is a poor long-term play and extremely risky in the short run.
There are better stocks out there that are truly undervalued, without
persistent inventory control problems, and unaffected by the coming
confusion in the 3-D market.
Jonathan |
