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To: jim kelley who wrote (151917)	1/25/2000 9:01:00 AM
From: Meathead	Read Replies (1) \| Respond to of 176387

I think Niles view is skewed pessimisticly due to recent history. I think he is on the side of low probability with his call this Q however. Sensitivity analysis shows that a few key variables will dictate the outcome of the Q and there is a lot of anecdotal evidence that these variables have not deteriorated. Namely... 1. Volumes. We've covered that. Jan besting Oct by ~100k+ units is highly probable. 2. GM. 20.2% last Q was a minor disaster and the guidance was for improvement. 21% is conservative (still historically low) and also highly probable. 3. ASP. Anecdotal evidence from numerous sources suggests that average selling prices have firmed. Even Niles is only predicting a 1%-2% drop. A small drop is highly probable. 4. OPEX. Consistently 10.6% or revenue. What are the odds that it stays at 10.6% this Q? Again highly probable. High probability on all accounts. Since Niles does not give full disclosure with his predictions (only random bits), it's hard to figure out just what he believes which metric is going to kill the Q this time. One thing though that I can glean for certain based on his $7B rev and 1-2% drop in ASP is that he is taking the IDC numbers 0f 3357 at face value an using them in his calculations (3357*2075=6966). I think this may be his critical mistake. MEATHEAD