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To: Sully- who wrote (30993)	8/29/2000 7:26:51 PM
From: Sully-	Read Replies (1) \| Respond to of 35685

One more RMBS post, this one from TMF at the request of the RMBS FOOL Bull author<ggg>..... Hi Tom, Here are the "killer arguments" as I see them: 1. With respect to RDRAM, explain the evolution of this market in terms of Gorilla-Game-Speak. a. RDRAM is a discontinuous innovation, requiring pain (and therefore meeting resistence) in its adoption. b. RDRAM is proprietary (patents) and open (IP can be liscenced at non-prohibitive rates from Rambus) c. A value chain has been fully formed and is growing stronger. A fully formed value chain is evident as product is now getting to paying consumers. The members of the value chain are many: RDRAM producers, test equipment vendors, packaging companies, chipset company (Intel), motherboard vendors, OEMs to sell systems, and consumers (you and me) One of the most compelling theses in the Gorilla Game is that once a strong value chain is established, it becomes "unassailable" as there are too many companies dependent on the success of the eventual product. d. We are in the "bowling alley". Two pins have been knocked over: one decisively .. the video gaming pin (Nintendo 64 and the phenominal PSII) and one is about halfway over (PC main memory pin .. I think this one will fall over with the advent of the PIV) e. All evidence points to tornado-like growth; characterized by +100% year over year earnings growth. f. The detractors arguments can be explained easily by quoting directly from the Gorilla Game book. I found it amazing when reading the gorilla game how well it applied to the Rambus story. The authors not only predict that there will be FUD, the predict its nature and intensity. (Pull the book out and search for quotes to support your rebuttal) 2. Price comparisons are a hot topic when talking about RDRAM, but sadly the news media keeps getting it wrong. The only price comparison that matters to the average consumer is how much it costs to get RDRAM in a configured system from an OEM. The price difference between similarily configured RDRAM and SDRAM systems is negiligable .. which means that companies like Dell are not paying the "spot price" for Rambus memory. (Duh) The spot price is what is always quoted by the media, and directly reflects liquidity in the after-market. Even so, the spot price has come down from approx 7xSDRAM to approx 2.5xSDRAM (in 6 short months). The message here is that RDRAM pricing follows the laws of economics just like any other commodity. It will continue to fall in price as more supply hits the market. That's just a fact Jack (or Tom) 3. The killer point .. which you should close with, is that even though RDRAM is almost certainly going to succeed in the market place, it may not matter anymore. As Mark Edelstone (MSDW) says, (paraphrased) "The acceptance of Rambus RAM is no longer the overriding thesis of this investment". Even though the FUDsters have pooh-pooh'd the Hitachi, Toshiba, and Oki deals with negative spin, the reality is that three multi-billion dollar companies have come to the conclusion that Rambus IP for DDR and SDRAM is unassailable. Over the lives of these contracts, we are talking about 10s of millions of dollars (if not 100s) You better believe that they did their DD before signing on the line. Good luck with your duel .. armed with you truth, you will smoke the bear. Colin aolboards.fool.com