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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Bill Jackson who wrote (80421)	11/18/1999 10:24:00 PM
From: Bilow	Read Replies (3) \| Respond to of 1572391

Hi Bill Jackson; Rambling thoughts re Via being more vertically integrated and a threat at the low end. I agree completely. I think Via will be a player for some time to come. I am, nevertheless, long AMD, at least for a few more months. I think that the Athlon has enough legs on it to give AMD at 2 or 3 good quarters. I think that AMD will be able to remain a viable player in the PC CPU market. But I don't see the future (10 years from now) as being a terribly pleasant place for PC tech stocks. To a certain extent, the U.S. PC industry in 1999 looks a little like the automobile industry of 1969. It's all about consumer tastes, and what kinds of ASPs industry is willing to live with. The bigger U.S. box makers missed most of the sub $1000 PC market for the same reason that the auto makers missed the subcompact market. They knew that there wasn't enough profits in the smaller items to keep the bottom line of the company healthy, so they pretended that it didn't exist. Of course the auto makers also had a few quality issues... The super computer industry went through quite a change when VLSI based machines came through the industry. Basically, VLSI allowed companies to produce more computers than their customers really needed. Rather than being a great boon for industry, the result was a disaster, with most of the dedicated super computer companies going under. If the super computer companies had been able to convince their customers to continue buying machines at the same cost, (but with radically improved performance), there would have been no industry collapse. The decreased prices brought in more customers, and more machines were sold, but prices dropped by more than the increase in units sold. So total revenues into the industry dropped, and better than half the supercomputer or mini supercomputer makers went belly up. It's all about filling customer demands. If you ever manage to fill their demands more or less completely, the industry has to suffer a retrenchment. It is only by having unfulfilled customer needs that the industry can continue to bring in increasing revenues each year. The same applies to the PC industry. If there had been only one supercomputer maker, it would have been profitable as hell. They simply would have sold the old machines, but with better margins. It is the combination of reduced costs and competition that caused the revenue decreases. The PC industry is in for a similar problem, I think, and I don't think that the x86 CPU companies are going to escape the bloodletting. But I think the worst effects will be felt by the box makers. -- Carl