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Technology Stocks : Diamond Multimedia

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To: The Duke of URL© who wrote (4330)	4/23/1999 1:22:00 AM
From: Eric Winterhalder	of 4679

Duke, I suspect that the new Rio will support additional formats (probably Microsoft's) and possibly contain more memory. IMO these devices will constantly evolve like just like PC's, graphics cards etc (more memory, more features etc.) DIMD needs to keep a step ahead of the competition coming down the pike and that which is already there (ie NOMAD) as the target market segment will want the latest greatest gadget. At this stage its kind of like the early 3D graphics card market which was being driven primarily by the PC game players which probably make up alot of Rio's target market (ie PC users between the ages of 15 and 25 ). They dont want to make the same mistakes they did in the graphics card area by having too much inventory of a device that will quickly be surpassed with the "new thing". Cost for the most part was not really an issue in the gaming graphics card market, everybody just wanted the newest and best out there. Additionally devices with similar capabilties are out there now (NOMAD) and I would think they are assuming that will reduce sales this quarter.

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