on CUBE. you said:
"I think their business is in trouble as far as margins go, not sales. Intel is banging them on the high end and IBM on the low end. They are a good little company, but they can't compete with that type of power, IMHO. Good technology, but the margins will be squeezed and profits will be crushed. But at this price I can't get too enthused about the outlook for puts, either. I would avoid it. It has upside back to 45 if they catch the big firms by surprise and downside to the mid-teens. But I would avoid it. MB"
you do know a little about CUBE. however, I'd like to inform you on the following:
1) margin in 2Q is 54%. improved from 1Q's 52%.
2) until intel MMX can be implemented on a $200 dollar VCD player. cube will still dominate the market. by the time MMX can be applied to consumer electronic products (atleast 5 years later), cube will be making chips a lot cheaper and more integrated than current technology.
3) IBM announced their MPEG-1, MPEG-2 decoder/encoder chipsets in March. they have yet to receive a single customer. it's been 5 months.
4) OAKT and ESST have announced MPEG-1 decoder chips. but, OAKT is going out of business. while ESST is still struggling to gain a customer. (*note, neither ESST and OAKT have MPEG encoder technology).
I don't see INTEL banging on CUBE anywhere beside the MMX threat in the PC market. (MMX won't come out until 1997, and nobody knows if they will incorporate MPEG function yet.) PC market is only 5% of overall CUBE revenue.
IBM is a multinational technology conglomerate. even though they are big, the MPEG development team is a very small percentage of total R&D. on the other hand, entire company of CUBE is dedicated to MPEG. very big difference. |
