Jack,
>> In regard to DVD, I am more concerned with the standards battle going on. <<
This won't affect OAKT a lot. OAKT's DVD products are for DVD-ROM and DVD-Player. Both standard are well established. The problem is the DVD-RAM standard but DVD-RAM won't take off until 1999 (product will be available in next few months for around $800) but DVD-ROM will take-off as soon as mid 1998.
Actaully the slower DVD-ROM take off, the better OAKT is since it is still the dominate supplier of ATAPI CD-ROM controller, there is roughly 60-70M (my guess) systems ship in 1997 and 60% use OAK. The Sub-$800 PC era will certainly have pressure on ASP but also help increase sale volume.
>> Are all they have now CD ROM controller chips ? <<
OAKT has a very diverified product base, the problem is more than half of its revenue are rely CD-ROM controller. It has other optical storage controllers which include CD-RW, DVD-ROM, VCD. It also has mpeg2/AC-3 decoder, some mpeg2 s/w solution, jpeg codec and some other digital imaging solutions (Pixel Magic). Audio/Video division is just diversified. New opportunities are USB, SCSI, Firewire...
I didn't expect OAKT to trade below $6 since it has good financial fundamental, a $5.95 book value and it is still selling 40M CD-ROM controller anually for the next 1.5 year. I guess they didn't paint a clear enough picture in its business strategy for the investors and this is its punishment. Long term the company will be okay.
PS: Today I took away ATY.to from my favorite stock list because I think all the good prospects have been digested (price move up 4 folds already). I have no idea how long ATI can maintains its leadship position. I still like the company very much but not the stock for now.
aC |
