Larry, And when was Value Line EVER right about MU? Remember, it was a 1 for performance in the 90s. -g-
The cost thing comes down to the difference between net and gross. MU is the lowest gross cost producer of the chip everybody wants last year. That is how they position. They are a very high cost producer on a net basis because they have no cash and are about to have much less, -g-, and their cost of capital is much higher than Japanese and Taiwanese rivals.
Remember a couple of years back when MU was saying that 64 Mbit chips didn't matter? And, when some goof from Loomis-Sayles said that he was buying MU because they dominated 4 Mbit production, where there was a shortage because everyone else was in 16 Mbit? Or when SDRAM was not going to happen because Burst EDO was better? It is the same scam they are pulling with embedded DRAM, where MU is nowhere. These bits of blue smoke and mirrors from Boise are part of their game.
I want to see MU's production breakdown in the 10K next year. My guess is that they still haven't made crossover. With the sub-$1000 pc the only thing selling, and 16 Mbit chips in nearly all those systems, I just don't buy that they are selling that many 64 Mbit chips to the server market.
Why does anyone buy MUEI computers if Dell's are cheaper? Not to mention Compaq's and H-P's, which are much cheaper than Dell's. But that isn't he big question. MUEI at least makes a decent box. Why does anyone in the world pay up for schlocky Gateway boxes? Not your bailiwick, of course, but a question for which I see no reasonable answer.
MB |
