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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: David Howe who wrote (52752)	11/7/2000 3:54:06 AM
From: Dave	Read Replies (1) \| Respond to of 74651

"First, in my opinon, PC growth is not necessary in order to support MSFT's share price. They are growing rapidly in other areas." MSFT makes money in Desktop software and in Office software. The rest of their business loses money. Check their quarterly statement. "Second, PC's are replaced every few years, so PC sales could stop at the 3% market penetration and still provide a solid foundation for MSFT's business." That would be stagnant. Zero growth. At zero growth, MSFT's PC business would then get a P/E of about 7 like that of Sears. "Third, My family isn't 6 people, it's 2 and I believe that 6 person families are becoming more rare." That argument doesn't hold up in the global marketplace. In the U.S., small families are average, but johnd is talking about going after the 6-billion-person market here. I think you'll find that in China the average is higher than two-person families. "Fourth, My family of 2 uses a total of 6 PC type devices (1 PC for each of us at work = 2, 1 PC for each of us at home = 2, 1 PDA (pocket PC) for each of us = 2). Yes, a total of 6 PCs for the two of us." That's nice. But are you suggesting that MSFT should expect similar numbers over the average of the world's population? Also, johnd already accounted for the PCs in the workplace. You're double-counting them. "Fifth, johnd is correct. PC growth will continue and PDA growth will continue at it's current dramatic pace." It can't. It's growing much faster than the population of the world. To continue at their current pace, every person on the planet would have to own several hundred PDAs in just a few decades. Dave