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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 93.57-0.5%Dec 29 3:59 PM EST
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To: KM who wrote (61175)11/14/2000 11:25:30 AM
From: visionthing  Read Replies (1) of 93625
 
re: Could someone tell me how he can be so bearish on Intel and so bullish on Rambus?

Intel is in a (temporary) fight for marketshare, this is going to mean eroding gross margins, at least until they win back the percentage of the market that has been lost. Intel has already declared rebate prices to deploy P4, these rebates are a reduction in margin for Intel, (a short term negative) but at the same time they are meant to spur sales of RDRAM. This is the only way that Intel can finally force down the price of RDRAM. Intel has backed Rambus financially before, and this is another example of their commitment to this technology. Rambus loses no gross margins, but potentially gains the marketshare from P4 rebates. Rambus is also currently negotiating new contractual agreements with Intel.

With 40%+ of the DRAM market having already signed, and the strength of Rambus' claims, it is only a matter of time before Rambus will be collecting 3-5% of all DDR. This will spur additional manufacturing of RDRAM, (lower royalties) coupling potential new contracts, with aggressive P4 rebates and it isn't hard to envision Rambus' future. Many would like you to believe that the failure of Intel to execute on Rambus is a telling sign. The reality is Rambus was always meant to begin in performance PC's and migrate downward. We are just beginning to see this reality.

"Rumors of the death of RDRAM have been greatly exaggerated."
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