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

To: Eric K. who wrote (42398)	5/17/2000 12:04:00 AM
From: pompsander	Read Replies (2) \| Respond to of 93625

Hi Eric: Lots of fur flying around today. Let's leave the relative performance strengths of the various Rambus/DDR iterations to the side for a moment. Frankly, that is where I think they should be all the time......because they don't matter. What matters is marketing. Yes, marketing, marketing, marketing. You acknowledge this in your last post, noting that it would be crazy (my word) for little AMD to take on mighty Intel. But, of course, that is just what AMD is trying to do with the great race to 1 gig. and beyond. The so called magic of "ONE GIGABYTE" is only about marketing, not performance. Heck, a 600 mg. system will run 95% of today's apps just fine, even with today's memory interface options. (Sorry if I am butchering the tech stuff, but I don't understand it. I am a marketing guy <g>). It is important for AMD and Intel to win this new millenium version of the space race...first to the moon and all that. Bragging rights matter to both right now. So let's assume for a moment that AMD produces a fine quality line of microprocessors late this year and next. Also, chipsets, mobos.....everything falls into place. They then enter the "marketplace" to sell their wares and are confronted with these realities of the real world: 1. price- Maybe they can sell cheap, but whatever they charge Intel can sell cheaper. They have to have enough of a distinction between their product and Intel's to compel the marketplace to choose their product. Maybe they can do this, but I have not seen to date how they will distinguish themselves enough to overcome..... 2. Leverage. Which is what Intel has, always has had and always will have in the marketplace. The long-standing joke about Intel keeping AMD in business so as not to run into monopoly charges has some small bite to it. When Gateway earlier embraced AMD products it did not take Intel long to explain to Gateway where its bread would ultimately be buttered. They and other boxmakers will remember. Sure, they will use AMD product in certain lines but when it is head to head time against Intel in a market segment Intel wants....watch out AMD. The floor can fall away pretty fast. 3. Perfection. Intel has stumbled, bumbled and fumbled the past few months. No doubt about it. Will they keep doing so? Maybe. But AMD has had its history of screwups too. Right now it is AMD, not Intel, that is priced for perfection. If Thunderbird or any other share-gaining product slips or fails, the damage to AMD will be far greater than the comparable 820 problems have been for Intel. Intel has the resources to slip, slip, slip and still get up and win the race. Not so, AMD. 4. Performance. Who cares? As a marketing whiz, I can take any product and show you why it is the best. I can make an edsel look faster, sleeker and more desirable than a corvette. Watch me work with benchmarks on the chips. Watch me quote only the most favorable reviews. Watch me commission studies to evaluate the performance issue until I get results I can use. Hey, it is done all the time, in every product line in America. I still shake my head at the devotees of both DDR and Rambus who pledge their loyalty to the latest from Tom's Hardware or some other hot shot. Hey, you show me yours and I will show you mine. In the end, who has the biggest ad budget, the best marketing presence and the smartest ad writers. Performance does not matter! 5. Cost (as distinguished from price)...Well, you have me here. Cost does matter...to a point. How much is open to debate. We all know Dell and Sony don't pay for RDRAM what Frye's is willing to sell it for (when they can get it). How much margin they skim off and the pass on is as closely held a secret as the combination to Fort Knox. But...the cost of RDRAM is too high. The cost of DDR is unknown, but will probably be "less". Less is one of those words which I can twist to mean anything I want. Less per channel, less per pin, less per degree of latency, less per chip, per what? Now, we all agree on the thread (I think) that RDRAM prices need to drop. This will normally occur if (1) the production methods become more efficient and faster and/or (2) more product appears in the marketplace, preferably enought to closely meet demand. Demand must be pretty good at this point (at least for PC800) cause price is still high for what is produced. PC600 and PC700 seem softer. So we need to get the price down. O.K. So, Price wars favor Intel. leverage favors Intel. The Perfection equation favors Intel. Performance is irrelevant. Cost - maybe in favor of AMD, but Intel has yet to open its wallet once again for inevitable Willy stockpile sale. Samsung's little teaser today about speeding up its production "a little earlier" to the 3 million chip a month level is just that - a teaser. How much will Intel pay to induce them to put a few more lines into RDRAM production? Right now, Samsung holds the cards and Intel will pay. Next year, we'll see. Sorry if I have botched the tech jargon. I don't understand it. I work from a marketing perspective and from that point of view I have to tell you that the coming wars are fun and fascinating to watch. I would be a little worried if I was AMD because as much as Intel has screwed up in recent months it is still far and away the big dog. Better not kick him.