BillyG:
I am a CUBE shareholder, remember. I would love it if CUBE were able to dominate the digital video/MPEG markets, but your arguments just don't make any logical business sense. You think CUBE can become profitable by maximizing its technological leadership and becoming the de facto standard that everyone will be forced to use. It ain't gonna happen. Do you really think the electronics industry wants to create another Intel monopoly that they are beholden too and must surrender the bulk of their digital video profits, too? Get serious, digital video is crucial to the electronics industry's future. Toshiba, Sony, Matsushita, Phillips et al. will do everything possible to make sure that no one company has locked up all the industry's most profitable jewel.
This isn't the computer industry where Intel can charge premium prices because consumers are willing to upgrade their PCs becuase of increased computing power and functionality. You're talking about the cheapass consumer electronics market where most products are going to be priced less than $500 total. I agree that people will be willing to upgrade and pay a premium price for the new digital standards when the new electronic products we talk about (DVD, next generation cable boxes, DBS, HDTV) become available. But once digital becomes the de facto standard, do you think people will want to pay premium prices for an upgraded consumer product every two years. When was the last time you upgraded your CD-player or your TV-set or your cordless telephone. More than likely, you only buy a new one after your old one breaks. And usually, your new consumer gadget is cheaper and does more than your old one did any way (even without paying a premium price for it). That has been the history of the consumer electronics industry.
I hope you're right, BillyG. I would love to log on 5 years from now, obese and totally debauched after spending some of my CUBE fortune, and write on this thread: "Gee, BillyG right, thank God I was such a dumbass." Your heart is totally in the right place as a CUBE shareholder, but I personally I think you have your aspirations set to high. I think the best CUBE can hope for is to be a commodity supplier to the electronics industry in a crucial area. So what, if CUBE isn't going to be the next Intel? CUBE doesn't have to dominate digital video in order to reward its shareholders. It can do very well just being a bit player. You will still be enormously well off if CUBE just turns out to be another Micron or National Semi.
As usual, I claim neither omniscience or infallibility.
Best Regards,
Grant |
