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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: DownSouth who wrote (34157)	11/1/2000 3:11:00 PM
From: EnricoPalazzo	Respond to of 54805

Re: DownSouth's suggestion that RMBS's "Licence or Die" strategy is value-chain homicide. The issue at stake isn't just RMBS's IPR on RDRAM, but on all currently viable types of DRAM out there. Intel just doesn't have the option of adopting alternatives to all DRAM out there now. Should Micron decide to fight this one out, and lose, Micron would no longer be able to produce DRAM (as long as RMBS is allowed to make good on their threat). In reality, this might not be as disastrous to Intel as it seems--most likely, Micron would have to go out of business and sell their fabs to some one else (at firesale prices). Bad for MU shareholders, to be sure, but not overly disruptive to the supply of DRAM (which is all that Intel really cares about). If this seems like an insane scenario, you know why RMBS shareholders are pretty confident Micron will eventually capitulate. I should note, that in the old days, Micron shareholders were often shocked and dismayed at how management never managed to compete effectively in the PC space, despite the fact that Micron PCs were very highly regarded (right up there with Dell). I don't follow Micron at all, but maybe management isn't so hot over there. By the way, though, I agree with your general claim that RMBS seems to be playing fast and loose with the Intel relationship. The scenario I outlined above wouldn't be disastrous for Intel, but you can be sure it would anger them, and they don't want another gorilla in their space (MSFT is trouble enough). I would be very surprised if Intel didn't want RMBS dead--they just need to figure out how to kill the parasite without taking out the host. Can they do it? Who knows? Only the paranoid survive... ardethan