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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: vince doran who wrote (82425)	7/19/2000 2:56:48 PM
From: Kachina	Read Replies (2) \| Respond to of 132070

Retailers <earlie>? This is old news. Very old. Disintermediation is it. Nobody buys from shops these days who has a brain. And the more wired the nation, the less people buy from shops. Why bother? They don't do much for you. The service is often worse. 2 years ago a buddy of mine got out of the PC sales business because he saw the writing on the wall. Sold out, and moved to sunnier climes. It was obvious then. Already happening. It's the old story of consolidation. FWIW - I just bought an iMac last weekend at a shop. But that was only because I had to have it to stick on a plane the next morning - Sunday. Otherwise, I would never have paid the shop premium. It's not worth it. It hasn't been worth it for a while. That said, the other thing that is happening out there is that we are watching the development of the next octave price point. PC price point is a couple grand, down to a grand, and up to about 5 mostly. This new price point is in the consumer market. $100 to $300 or so. A factor of ten down. It's palmtops and high function cell phones. Those will expand in function and they are going to do to PCs and Microsoft, what PCs and Microsoft did to Mini's like DEC in the previous octave price point cut. Hey, you can buy a keyboard now for those palmtops, and people are using them. Watch out. Tech is going to just explode. Remember what happened with PCs? We are standing on the brink of the next computing revolution. And semi's are going to run out of capacity. Watch out with MSFT though. So far, no company in history has successfully rebuilt its business at a new, lower price point. MSFT will have to work awfully damn hard to just stay even. Problem is, they cannot afford to let go of what they have. It would kill their stock price. And that is why nobody builds down successfully. New blood, new bottles. Tech will fly.

To: vince doran who wrote (82425)	7/20/2000 6:40:03 AM
From: Earlie	Respond to of 132070

Vince: Gateway has been on a store-opening binge for some time now. With each new store opening, one would expect that this would add significantly to the company's PC revenues. In fact, it has, but only incrementally. (I won't go into the fact that the company is capitalizing much of the costs of this store opening activity, which of course jazzes the bottom line for the near term.) Note that roughly 40% of Gateway's revenues now derive from "beyond the box" (the company's words). Financing, training, peripherals, interest income, investment income, etc., now represent 40% of total sales. Subtract a percentage of this from total revs to get a more accurate picture of actual PC sales. GTW also takes significant liberty with what it reports as "revenue". I haven't had the time to dig deeply into the company's numbers (yet), but since much of their PC revenue derives from PC "leasing" and PC "rent-to-own", I suspect that properly stripped down, the PC revenues would be even worse than what has been reported. Recall that GTW is also messing around as an ISP of sorts (although there have been lots of problems in this foray). GTW's revenue growth no longer provides a linear parallel with PC growth. Best, Earlie