Hi Bill,
You stated that "Sun will have a hard time continue the pace they are on". Is that your opinion or do you have evidence to back that up. The truth of the matter is the increase of sales of Ultrasparc only enhances that Fourtune 1000 companies look for the best product and its definitely not the NT. Eventually there will come a time consumers will do the same for computers.
As for Intel, I think that you are misuderstanding my stance. My pressure is towards Microsoft and their way of trying to force their software upon everyone else. However I do believe that Microsoft and Intel pressure their allies (other manufacturers) into lowering costs for the PC. They do this so they don't have to be the ones to lower their prices. That is why there is alot of resentment toward MSFT and INTEL for their bully type mentality. Don't get me wrong, Intel sells the majority of microprocessors and have the capacity to make however many they want. In fact the chip they sell most is the P133. In fact there was an article last month in Investors Business Daily about Intel having trouble with the production of their higher end chips, their Pentium Pros.
You also stated that the cost of a pentium is lower than a UltraSparc. Of course it is, it's inferior technology. Do you honestly believe that in 1998 they will sell current Pentiums? Last year, how much did they sell for (IE P133)? Twice as much? Most of the chips they sell are for consumers. Let's admit that Intel had a great year this year, their revenue will probably increase to $20B compared to $15B the last fiscal year. Bravo! Here's the question, can Intel noy only duplicate it but grow to $25B? If you think they can your crazy! I'll tell you why,
1. They will continue to lower prices which means they must sell atleast 30% more chips than last year (this year).
2. Facing competition from AMD and Cyrix, in fact consumers are becoming more knowledgeable, they know how slow Pentiums are. In fact all my friends that have recently bought computers bought Cyrixs.
3. Competition from NC's.
4. Expansion into other chip lines this cuts earnings by the way. They plan to make RISC-based chips for their Pentium Pros, to conform to UNIX standards, amazing huh!
Intel and Microsoft expect their growth to come from businesses with the Pentium Pro and the NT. Here's a question for you, what happens when they do not meet expectations?
Here's a tip for you, "don't ever fall in love with a stock". Its bad for business. Remember IBM, the good old big blue, families lost alot of money on that one. I like SUN because it is UNDERVALUED. When I believe it becomes overvalued I sell faster than anyone else. I also liked MSFT and made a killing but it is OVERVALUED, heavily dependent on Windows NT and the launching of Win 97. Intel still has room for growth in the next few quarters. They will continue to grow because no one has the capability of producing the same amount. However, competitors can "chip" (HA!HA!) in. I guess you can call them the "McDonalds of the chip sector".
Ellison
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