Shane, I wanted to follow up on your observation that the current "cycle" is running against the fortunes of the hardware folks, while the software folks seem to be doing okay. Agreed.
Now, if I'm a long suffering hardware guy and I'm seeing my ASPs dropping like a rock, what are my options? Lay off workers, hammer component suppliers for lower costs, figure out a way to sell more units---we are seeing all of the above depending on whether you're looking at Intel, Dell, Cyrix, or Compaq as proxies for "hardware guys".
But ultimately don't I have to restore profit margins to the good old days by shifting to the next level of fab plant super-duper dom [technical term]? I mean if the new paradigm is $500 machines on the low end and $1500 for a screamer that we would have called a work station 5 years ago, I gotta do a whole lot more than just fire people. I gotta get more chips out of each wafer: I have to FUNDAMENTALLY adjust to what is FUNDAMENTALLY a new ballgame, not a cyclical dip, but a structural shift as non-techy economists would say
. So shouldn't AMAT and all those guys be looking like the logical beneficiaries of all the current hardware/boxmaker woes? Mike Doyle |
