Hi Meathead; Regarding what I expect out of the next
18 months of PCs: I expect that the 200 MHz Pentium
I put together 18 months ago will still be viable, but
I will replace it with a Katmai machine about 18 months
from now.
Where is the industry going? More integration. Take
a look at the size of your typical motherboard these
days. More and more stuff is getting integrated, and
this means less and less value added by the integrators.
The box maker's margins are going to decline as well,
as the ASP of their boxes decline. Give it more time,
this is the way the industry works. And the increase
in sales is not going to be enough to help revenues.
Over the long term, say goodbye to the high stock
prices for box makers (and retailers).
As far as my understanding of general technical details
of electronics and how this fits in with stocks, it takes
a while for these sorts of things to come to fruition,
and by the time they do, everybody has forgotten about
what was said earlier on. For instance,
A lot of RMBS people figured all PCs would eventually
have RDRAMs in them, due to Intel's support, and had
run the price up to nearly $90 per share. For instance:
exchange2000.com
I knew better: Designing only RAMBUS compatible processors
would be an incredible gift to the competition, and isn't going
to happen. 8/29/97
exchange2000.com
Was I right? Lets take a look:
Intel Reconsiders Rambus Transition
techweb.com
Intel architects tip Merced details at developers forum
techweb.com
Here is what happened to the RMBS stock price:
tscn.com
The $80+ stock is now less than half that, (and still
overvalued).
My understanding of hardware is second to none. I know
how hardware is designed, I design it. I know how costs
of goods sold work, I've computed them. I have spent many
hours figuring out how to reduce costs in projects that
later were produced in large volume. I know this industry.
Integration is not done with this industry. It will not
be done with this industry for another 5 years, probably.
When it is done, PC box profits will be dead, dead, dead.
Incredibly powerful PCs will sell for $50 to $100 over the
cost of a similar size TV set. And DELL will be fairly
priced at 10x earnings. And those earnings will be a
fraction of current earnings.
Could I be wrong about this? Not a chance. But DELL is
probably going to go up tomorrow, I think, and as a day-
trader, I intend on getting in on the action.
-- Carl |
