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Technology Stocks : Diamond Multimedia (DIMD)

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To: Kashish King who wrote (46)9/13/1996 11:28:00 PM
From: Jonathan Quick   of 99
 
"First of all, NT 4.0 is not backward compatible with all of the '95 API sets."

True, but as a practical matter NT 4.0 is backward
compatible with Win 95.

"Second, the limited presense of Window '95 in business is not going to
dissuade business users from upgrading workstations and servers which is
by far the largest segment of installations."

I don't believe I specifically indicated that Win 95
was a superior alternative for business users. Other
than the Win 95 interface, the new version of NT doesn't
offer a great many compelling improvements over the
PREVIOUS Windows NT release. Again, IMHO,
Diamond's product line is ill-suited to use in the server
market, regardless of operating system.

"Third, you can't have hardware oriented services on an utterly hardware
independent operating system so Plug 'n Play is out as is laptop support."

The absence of Plug 'n Play rules out the bulk of
the home market. The absence of laptop support is
a serious limitation for business purposes.

"The upcoming 3D applications and tools are so compelling that Diamond
will do just as well in the business area as the home, IMHO."

Again we come back to the issue of driver support. Diamond's
Win 95 drivers are unstable. The inclusion of video drivers for
Win NT 4.0 on the NT 4.0 CD-ROM isn't a very compelling
selling point when one considers the fact that the 3-D
capabilities of the 3000XL would have to go unused until 1998.
WIthout Direct 3-D support in Win NT 4.0, sales of Diamond's
Virge-based accelerators to the business market are likely
to prove to be underwhelming at best.

Without improvements in Win 95 drivers, Diamond will also do
extraordinarily poorly in the home market. Bear in mind
that there are a slew of alternative 3-D accelerators
scheduled to hit the market in December, all of which feature
higher performance than Diamond's Virge-based mainstay.
With real competition from alternative processors, Stealth 3-D
driver instability is certain to be a drag on sales.

Jonathan
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