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Technology Stocks : DELL Bear Thread
DELL 127.96+4.4%11:47 AM EST

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To: Lucretius who wrote (1747)8/31/1998 6:35:00 PM
From: Bilow  Read Replies (1) of 2578
 
Hi Lucretius; The topic of the performance difference
between processors intended for high end and low
end PCs came up recently...

By some wild coincidence, an article came out in
EE-Times that illustrates what I have been talking
about regarding price performance of the latest
processors: (For "manufacturer" read "box maker,"
i.e. DELL.)

Intel, AMD Micros Blur Performance Contrasts
techweb.com
Faster Processors = Manufacturer Dilemma
Analysts nonetheless said they believe the faster
Celerons may create a dilemma for original equipment
manufacturers seeking to sell performance desktop
systems based on the 300-MHz Pentium II against
lower-priced systems based on the Celeron 300A or
333. Performance and features are likely to be
similar between Pentium II- and Celeron-based
systems, and OEMs may be forced to price systems
accordingly.


The basic problem (in hardware, anyway,) is that
single chip processors are very, very fast. And
putting as much as you can on one chip makes it
even faster. The basic marketing problem is that
the same processor chips will be used in both the
low end machines with standard graphics, disk drives,
etc., and in much higher end machines.

This will bring the pricing of high end machines
down by quite a bit.

Once this cat gets out of the bag, (i.e. machines
with much higher levels of integration), there just
is no way to put it back in. The situation is similar
to thousands of other electronic stuff over the years.
For instance, op-amps. Originally these were built
from piles of discrete parts, and there were companies
that sold boards that did amplification. Once a
company produces an op-amp integrated circuit, even
though it is initially a high-end device at a high
price but useful for its small size, it is inevitable
that the industry will cost reduce it and use it for
far more general purposes than originally.

The first use for highly integrated processors in
the PC industry is in lap tops, where space is at
a premium. But as soon as that problem is solved,
it is inevitable that the technology, and the low
production costs associated, will bleed into the
mainstream.

-- Carl

P.S. What a market day! My prediction for tomorrow
is a gap open, probably down, but possibly up, followed
by a nice 300 point DOW rally. What say?
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