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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (33856)	11/4/1999 1:13:00 PM
From: Dave B	Read Replies (1) \| Respond to of 93625

Don, You raise an interesting business case with your article on Packard Bell, one which I think is often lost in our day-to-day thinking. In 1994, I believe it was, I was a member of a listserv group where one of the members asked for a recommendation for a computer brand. At the time, Packard Bell was the leading retail brand on the market, focused on being the price leader through the channel. The responses that came back had a couple of suggestions for Compaq, a couple for Dell, and a couple for HP (no IBM curiously enough). On the other hand, there were about a dozen responses that said "Do NOT buy a Packard Bell". The stories mostly revolved around the poor quality of the components (remember when Dell sued Packard Bell for putting used components into the systems?), the poor quality of support/service, and the fact that everything was soldered to the motherboard (if you had any problem you had to box the system back up and take it in to your retailer or send it back to PB). At that point I knew that Packard Bell was doomed. I even recommended to one of my clients (though this wasn't my area of responsibility) that they reduce their reliance on Packard Bell as a customer (they were their largest customer at the time). How does this relate to Rambus/Intel? Nothing will kill you faster in this business than a reputation for bad products. Nothing. Especially in a "commodity" environment where alternatives exist. Word-of-mouth in the high tech business is absolutely critical. You can recover from product delays. People rarely remember that a product was delayed. It's much more important that it work. It's much more difficult to recover from a reputation for low-quality products. If Intel brings out the 820 and it suffers additional quality problems, RDRAM will be DOA. If, on the other hand, it works correctly and Intel continues to push it as the future direction of memory (the Marketing component that several have discussed here lately), then there is a phenomenal chance it will succeed as the dominant architecture. Dave