Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: FLSTF97 who wrote (17934)	2/14/2000 11:04:00 AM
From: John Stichnoth	Respond to of 54805

Re: CREE switching costs. Hi, Fatboy. I agree with the gist of your post, distinguishing between "approval" barriers vs. "cost" barriers. The barriers to approval are formidable, relating to (1) perceived risk--unless something goes wrong forcing a product launch delay, or recall. by the automaker or subcontractor, and (2) time to market. And, as you note, cost is not the primary factor--Still the switching cost in this case is unlikely to [be] huge (say $100,000's +)--which is quite small in comparison to the market being addressed. Now that CREE apparently has one company (VW) using the blue LED display, use with succeeding companies' products should be easier. The route that CREE is apparently taking into this segment is the same route that successor technologies might take. It really hasn't taken CREE that much money to get their product (as opposed to the cost of inventing the product itself) into "the" product , but it has taken some time. Which should mean that we would have notice long in advance of any threats in the segment. Best, John