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Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: Arrow Hd. who wrote (6479)	6/26/2000 9:41:00 AM
From: Jules B. Garfunkel	Read Replies (1) \| Respond to of 8220

Arrow, I am somewhat confused over your post. You seem to be advocating exactly the same points that I have been trying to make here for some time. However, when you add, "That is why I never agreed with your Intel takes over the server world argument", I am troubled. I never said that IBM would be happy selling Intel products instead of their own manufactured Servers. What I am suggesting is that IBM, over time, may not have a choice. I agree whole heartedly with your, "If you are going to be a top to bottom technology company in control of your own destiny then you have to control the food chain and nothing represents that more than chips." I have posted similar words myself. But Arrow, this is exactly my point. At a minimum IBM will feel pricing pressures from the Intel's (Itanium/Merced) Servers) which begin shipping within the next couple of months. As you say, "IBM has always been the largest chip maker for Servers" . Therefore Arrow, IBM can ill afford to see any erosion in their Server business. Continuing on you aver, "That would be a loosing business model for IBM and IBM has the technology development to do otherwise and so that is what they do." Yes, it would be a loosing business model, but this assumes IBM will have the choice in the matter. As you say in this excellent example, "Using mainframes as an example, IBM's margins have been reduced because of price attrition due to competition from outside the platform (Wintel, Sun, HP, etc.) and from within the platform (Hitachi, Amdahl, Fujitsu, etc.) Acceptance of IBM products has never been higher. Mainframe MIPs have never, ever, grown this quickly in such a short time but the K per MIP is coming down every quarter. So it is not from selling someone else's lower margined products it is price attrition." EXACTLY! my point also. Best Regards, Jules