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Technology Stocks : All About Sun Microsystems

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From: Arthur Tang	4/3/2007 10:11:02 AM
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Recent wall street analysts are all projecting 10-13 cents earnings for Sunw based on channel performance. Channels being Arrow or Avnet or even All American SEMI. But we are looking for 40 cents annually for Sunw including their service contracts? Sunw, however, had more control of their business going direct with their service unit. Traditionally, distributors sell to their customers in large volume and cushions the manufacturers for lean time such as summer vacation time. But the electronics business is shifting to enterprise systems; and component business is changing. Military and consumers are still dependent of distribution; but large enterprise systems because of the service nature, is shifting to budget their requirement based on the manufacturer's production capacity. Customers had to contract part of production capacity for prompt delivery. Digital Equipment now part of HP, used to have commitment of 10 year orders to secure a part of the DEC production capacity. Wish its still the old business but distribution has to start looking at more of a service component for their share of the computer market. Military needs larger computer systems with service contracts.

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