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To: John Koligman who wrote (102596)	4/19/2000 8:50:00 AM
From: Amy J	Read Replies (3) \| Respond to of 186894

RE: "I am perplexed how a leading supplier with a dominant market share sitting on $20 billion...[cash] and marketable investments could fail to invest enough to provide adequate supply to meet what has to be viewed as very modest demand growth," LaFountain wrote. --------- Thread, LaFountain is implying unit growth is "moderate?" But was it? I think he's wrong. Let's run some numbers. Last year, ASPs declined, then they held steady per a previous CC. Revenue = Units * ASP R = U * ASP. Plug any ASP YOY reduction into the formula, say -25%. Let's select -25% since consumer PC prices probably dropped at least 25% YOY (PC$2500-$1875). (Maybe someone could look this up). The CC said R grew by 3%, so that's a coefficient of 1.03 on R: Thus, if 1.03R = U * .75ASP, this implies U's coefficient changed to ~28%. U's coefficient is approx 1.00-.75/1.03 (or, one could estimate approx 1.25*1.03-1). Plugging this in, if ASP YOY was -25%, then 28% YOY unit growth. A 28% increase in units is not "moderate." Let's try some other numbers - plug in any ASP delta: If ASP YOY was -10%, then 13% YOY unit growth. That's moderate. But, we all know the PC dropped more than 10% in price. So, skip this. i.e. Looks like LaFountian could be very wrong (on this one point, and that bugs me because I would expect accuracy in an analyst on all points - otherwise, how would I know which statements to believe? But kudos to him for going up to bat for asking some of the harder/important questions about production. I liked how he poked on the good & hard questions (and hope for more of this in the CC). Another way to do this calculation is: take processor unit estimates from the analyst reports or the market research firms. I would venture a guess that he accidently was thinking/using revenue or profit growth, when he should have been using "unit growth" relative to "supply." Amy J

To: John Koligman who wrote (102596)	4/19/2000 8:58:00 AM
From: Amy J	Read Replies (1) \| Respond to of 186894

Thread, RE: "Level One hasn't contributed to the bottom line," Kumar said. "The company continues to rely on microprocessors, which is concerning." ------- He's smart. Glad to see this concern get expressed. But, I'm disappointed the analysts did not ask much about the new businesses (Level One, Server Farms, Dialogic) during the CC. This is where someone who represents the individual investor (like Motley Fools) would be useful to have in the call for Q/A. The Motley Fools polling feature (which I just discovered the other day) can be used to poll posters for questions for the CC - so, all individual investors could be represented through Internet collaborative polling. Maybe Motley Fools does this already (i.e. Q/A polling for CC). Amy J