James Choi wrote:
>>So, I am not that optimistic about the future of this company
>>anymore. There is a risk that CF might become a commodity item
>>(like RAM and Hard Disk) and enter a bloody over-supply-based
>>price-war in the near future.
This is what Michael Dell thinks of the 'commodity'
hardware component market.
(from upside.com
Q:You announced some price cuts because of falling component
prices from Asia. Do you expect that to continue throughout
1998?
A:I suspect there will be a favorable environment for buying
components for a medium-term period, maybe for the next year.
Certain countries--you know who they are--never questioned the idea
of capital spending. So they rack up this huge debt, spend all this
capital and presumably figure at some point in the future they're going to own the world. The strategy didn't work, but in any case, that was their strategy. So if you're a buyer of these components, I guess the good news is that the investments have already been made that are going to affect the production for all of [1998].
Q:The question is [what happens] beyond that period.
A:Right. Will they to continue to invest in capacity? If they don't
continue to make the capacity investments, they [quickly] fall off the
treadmill, and you'd then have grave consequences not only for the
equipment guys, but for everybody. Your $1,000 PC becomes a
$4,000 PC. If component prices go up too fast, people say, "I'll wait a little longer until I upgrade my PC." Or, "Oh, we didn't need that extra PC yet."
These countries and these companies need to have more respect for
capital, but not get off the treadmill. If they do, they're putting guns to their heads.
Ojing. |
