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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (37664)	10/3/2000 12:43:04 PM
From: Jacob Snyder	Respond to of 70976

re: "At current valuations some of the boxmakers appear attractive" Now, that I've got to disagrea with, strongly. As margins for PC operating systems and CPUs decline to commodity levels, margins for the boxmakers are going to get squeezed even more. Margins in the boxmaker business have been declining for 20 years, have accelerated recently, and that pattern will continue. They, too, need to find different ground to stand on, or they'll end up with margins like Safeway or Walmart. They have to get into totally different businesses, and there is no obvious pathway to that migration. Selling web access, becoming financing companies, selling other boxes full of chips: all the boxmakers are desperately scrambling. Most of them won't make it. The industry may may end up with PC manufacturing being made by divisions in conglomerates, and sold as a loss-leader. IBM's PC division would be a model for this. This is a bad business to be in, now and for the forseable future. The chances of Wintel successfully migrating are much higher than for Dell or Compaq. re: "Will intel and microsoft become GE or GM? That is the essence of the question." How about: Will Wintel become TI (getting out of memory, into DSPs), or will they become Xerox? And, yes, a sense of urgency (which both have) is a necessity for success. If Intel keeps going down, I might get back into it.