Robert, the problem with your scenario is Intel will lower there prices pinching Cyrix's profits further. They are about to announce cuts with the intro of MMX. Remember they didn't do the traditional cuts last quarter. Also you're assuming that no switch to the Intel 300 Mhz P6 w/MMX will enter the scene.
Worse Cyrix has yet to sign any real big customers, I can't even find computers advertised in Computer Shopper w/Cyrix chips. I had to dig into the motherboard vendors to find them. This implies they are only purchased by home hobbiest types, who don't mind building there own PC.
The clone Chip companies have the inherent disadvantage of having to see what Intel does before they can act. Further, consmuer/home PC sales have weakend, businesses are buying this spells even less sales for the clones as business would not take such a risk as to buy a clone CPU unless a big player like Dell or Gateway or Compaq offered support.
The story on Cyrix isn't getting any better, I can't imagine what kind of corp buyer would go with them given there internal problems and past money losing quarters. This is not to say they don't have a good product, but I wouldn't bet my companies survival on Cyrix hardware. We use computers to make us more productive, not to save a few bucks buying computers.
I would wait on committing any kind of money on Cyrix, so you might miss the first 20% in gains, better than a 100% loss. They need to do several things in terms of sales and getting some big contracts before I'd jump in. In terms of an investment I'd compare them to Apple, same money and customer problems - I'd say wait, show me, before you hitch a ride. |
