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Technology Stocks : JAVA - Does anyone have info on the new NC computer?
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To: Sing Chong who wrote (296)12/10/1996 3:41:00 AM
From: jim kelley   of 524
 
Sing,

Sun has two main core technologies. One is their SMP UNIX (Solaris)and the
other is their Supersparc and Ultrasparc technologies. They make their
money selling servers. Sun does good engineering on its servers. Its
software is less well engineered. they have some other peripheral technologies
for CAD software and database software via ORACLE and SYBASE.

Microsoft is attacking UNIX with its Windows NT 4.0 which has SMP capability.
Intel is attacking Sun with its Pentium Pro micros. Sun probably has no advantage
in the low end server market anymore. The UltraSparc is a 64 bit processor and
Intel does not yet compete with them in this area. However, within a year even the
64 bit processor area will be under assault.

Sun is not just up against Intel and Microsoft anymore. It is now competeing against
CPQ, DELL and GATE as well as Auspex, SGI,DEC, HP and IBM. So they are trying to do
everything while these other companies are specializing, i.e., operating systems, microprocessor chip
sets, and the box makers.

Within 12 months Sun's market situation will have deteriorated because they
can not compete head to head against such an array of companies.
Even if the NC were to find a volume market, it could not save their business.
An NC is very easy to make and has no proprietary core technology
that is patentable or otherwise capable of being protected.
Remember, one can make a NC by modifying the PC bios to perform a boot
over the net without a disk and adding a JAVA interpreter.

Also the PC manufacturers have great revenue and earnings growth.
Currently, Sun is being drawn into the price reduction wars in order
to maintain sales. Its margins are shrinking on the affected products.
Its needs to get as much revenue as it can off of its Ultra servers
because the desktop units are under attack.

Sun is not dumb. It knows that the NC is not where it is at. They have
to sell their core technology because that is all they have. The NC is
a diversion.

Barring a major change in their business model, I think they are going
to be in serious trouble within a year if not sooner.

Sun does not have the degree of imagination and management savy that
Intel and Microsoft have demonstrated.

McNealy is not in the same league as Grove and Gates.
Apple is different than Sun. But I think that Sun will be
in much worse shape than Apple has been.

NT is ahead of its projected growth rates and that is prpelling
the growth of the box makers like DELL and CPQ. They are making
rapid inroads into Sun's desktop and low end server business.

Hope this helps.

Just my opinion
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