Hopefully Tuesday I can return to some down and dirty trading. Didnt get to be in the market at all today--but here are some stocks I am watching for tommorrow.
IOM--Earnings after the bell, could be very tradeable and could break $20
CPU--CPU stores are PACKED! Earnings for this stock are Wednesday--I anticipate some good buying tommorrow
IFMX--Getting hit hard lately, however, I saw on CNBC tonight that S&P has a 5 star bullish rank on this stock. I bought Friday and am still holding that position.
CYRX--This stock is very tradeable--Check out this great story from the San Jose Merc:
Unprecedented competition arrives
in the field of microprocessors
BY RICARDO SANDOVAL
Mercury News Staff Writer
THERE'S no longer a need to wait for technology to tumble into your price
range.
The net result of cheaper, faster computer technology and of supply-demand
economics is a buyer's paradise: a fully loaded personal computer system selling
for less than $1,000.
At the base of the retail PC price war is a crowded field of computer makers
jostling for market share. And behind that is unprecedented competition among
makers of microprocessors, as Advanced Micro Devices Inc. and Cyrix Corp.
take on chip king Intel Corp.
Microprocessor prices alone don't control the retail price of a personal computer;
there's also the costs for hard drives, memory, semiconductors and other PC
components. Statistics from Dataquest Inc. of San Jose show that while average
microprocessor prices have risen 10 percent since 1994, PC prices have risen
just 5 percent, partly because other components are cheaper now.
In fact, the microprocessor market hasn't experienced much price competition
because it is dominated by Intel, whose more-expensive chips are in roughly 80
percent of the world's PCs.
A grab for greater market share by AMD and Cyrix -- whose chips are cheaper
-- can only help drive costs down for manufacturers. This will make it easier for
manufacturers to pass on greater price breaks to consumers in 1997, especially
now that Intel seems likely to return to its past pattern of cutting chip prices before
it launches a new model. AMD and Cyrix usually follow Intel's cuts, and PC
makers have often responded to such moves by lowering their suggested retail
prices.
On Feb. 10, Cyrix will launch its newest microprocessor, code-named GX, that
will provide some multi-media computing power, although not as much as Intel's
latest MMX chip. Multimedia-enhanced chips make games move faster and
graphics look cleaner, with almost television-quality resolution. The GX's debut
will be in a system priced below $1,000, to be made by ``a top-tier computer
maker'' that Cyrix would not yet name.
The GX microprocessor comes on the heels of Intel's release of its MMX chip
with advanced multimedia capabilities and a price only slightly higher than the
high-speed Pentiums already on the market. And AMD, which for years has
lagged a microprocessor generation or two behind Intel, insists that before the end
of March, it will have a multimedia-enhanced chip to offer PC manufacturers, at
prices below Intel's.
``When was the last time you saw AMD get a chip out within the same generation
that's somewhat equal with Intel?'' said Linley Gwennap, editor of the
Microprocessor Report. ``I see a year in which a certain percentage of (PC
makers) will be willing to move a little away from Intel . . . That little bit of extra
market share will be great for AMD and Cyrix.''
But what passes for competition in the microprocessor market is seeing Intel's
slice of the sales pie shrink a mere percentage point or two. As one analyst put it:
``A few more crumbs off of Intel's $10 billion table is a pretty good year for
AMD.''
No one denies that Intel, with $4.5 billion earmarked to expand its chip
manufacturing capacity in 1997, can beat both AMD and Cyrix when it comes to
meeting growing market demand for reliable streams of products.
Ready for battle
Still, the Santa Clara-based chip company likes to think of itself as in a
close-quarter battle with AMD and Cyrix. It drives its designers and engineers to
come up with better microprocessors quickly in order to stay ahead of the
competition.
``We want to make obsolete our own products before the other guys do,'' said
Intel spokesman Howard High. ``The biggest competitive challenge we really face
is not being able to meet demand. The moment we can't satisfy a customer, those
PC makers will start looking around for someone who can.''
That may be how Intel sees the market, but not all competitors would agree.
Some chip makers say -- in a whisper -- that Intel is not shy about politely flexing
its market muscle if a manufacturer orders too many competing chips.
``Intel simply goes to its preferred customers, and what they hear is something
along the lines of, `If you're buying a lot of products from someone else, we can't
give you advanced information on what (Intel) is planning because we can't be
sure of your loyalty,' '' said a chip industry analyst. ``The market consequences for
PC makers are enormous for making a mistake.''
Intel says it does no such thing. And others, like G. Dan Hutcheson, president of
VLSI Research Inc., scoff at the idea. He says, simply, that Intel doesn't have to.
Lots of examples
No major PC maker would talk openly about its relationship with Intel. But
industry analysts easily provide examples. Janet Ramkissoon, with Quadra
Capital, Inc. in New York, points to Compaq Computers, the industry leader,
which years ago steered more of its systems to AMD microprocessors. ``It took
a long time for Compaq to get back onto Intel's preferred customer list,'' she says.
A Compaq spokeswoman said, ``Intel is our primary chip provider, but we look
at every kind of technology the comes down the line.''
Given Intel's overwhelming market presence, however, a PC manufacturer's
ultimate power will come from a stronger brand name for its own products rather
than relying on Intel's name.
This year analysts predict PC makers will sell nearly 85 million machines
worldwide. That's 43 percent more than just three years ago. But while demand
and sales jump, the average price of a home computer system has only gone from
$1,999 to $2,090 in the same period -- a pace that lags well behind inflation over
the three years.
PC makers have started dressing up their systems with radical new looks --
industrial-styling meant to pull consumers away from the idea that a computer is a
computer is a computer.
Retro marketing
Analyst say some PC makers plan a retro marketing campaign in 1997 -- one that
will make the computer maker's name the greater sales hook than the type of
microprocessor inside. By minimizing the name of the microprocessor, some PC
makers are betting that less sophisticated consumers will buy based on the whole
system's name and reputation.
This is aimed at diverting buyers from the powerful lure of the ``Intel Inside''
campaign. That marketing coup began several years ago when PC makers were
struggling and Intel offered to help pay for ad space and let the aura of higher
quality Intel microprocessors attract consumers. But now that PC sales are
booming, some manufacturers seem stuck selling Intel-powered systems, which
are built around relatively expensive Intel chips.
What PC makers would like to do, analysts say, is de-emphasize the
microprocessor so they can buy lower-cost AMD and Cyrix chips. That would
make it easier to keep up with competitors who are targeting the fresh market of
newer, less-sophisticated PC consumers. These technology newcomers are likely
to be more price sensitive, and less concerned about buying Intel's best chips.
AMD is trying to help PC makers with an educational marketing campaign aimed
at industry executives.
Getting to know you
``We want people to know a little more about AMD and what we do,'' said Scott
Allen, company spokesman. ``We want to get to where a consumer walks into a
store, and maybe they're not asking for AMD, but if a salesman says AMD, it
won't kill the sale.''
For its part, Cyrix insists it can be a PC maker's best friend, supplying chips that
can help manufacturers lower their purchasing costs and protect thin profit margins
even as they offer good deals to consumers.
``Branding the PC name, not the microprocessor, becomes even more critical
(now),'' Ramkissoon said. ``Now with AMD back and Cyrix ready . . . all it takes
is one of the big five manufacturers to change the dynamics of what other PC
makers think of the competition among microprocessors.''
More later,
Mills. |
