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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 91.87

+1.8%

Dec 5 9:30 AM EST

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To: Clive Roberts who wrote (351)	10/30/1996 9:56:00 PM
From: David Mosley	of 14451

It seems to me that the debate over wintel workstations needs to center on the fact of margins. Wintel machines are going to be very, very low margin machines, even if they are geared up as workstations. SGI is not a company which operates on low margins. They probably have the highest margin of any computer hardware company, and they can do that because they sell the most powerful high end machines. This is going to be their market in the future. They will not be players in the low end workstation market, that's not what they are good at. Therefore the acquisition of Cray is a patent admission of this fact. SGI will be focusing on high end machines in the future, where they are in a very dominant position at the moment. The question is whether or not this is a market which is shrinking or expanding... Is the demand for very high performance computers rising or falling, now that wintel machines are closing the gap. When will the folks in hollywood, the molecular modeling folks, etc, be able to use a wintel machine? I don't know. Does anyone have an opinion?

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