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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: stribe30 who wrote (73623)	5/26/2001 3:37:06 AM
From: NightOwl	Respond to of 93625

Hi Stribe30, I don't see how we can put much stock in DRDRAM price, production or shipping numbers as evidence of "demand" by either OEM's or consumers. There was some blurb in the last couple of days about new "rebates" on DRDRAM by INTC. It was already at $70/MthBd at the outset of P4 commercial production. For all we know, a portion of the P4's historic price slashing is itself attributable to its memory limitations. The fact that its INTC, and not Samsung, et al., giving up these rebates is an obvious indication of who is "demanding" this product and who is not. Its exactly the reverse of the California energy market. There the middle man has no need to force the MFGs to produce the megawatts and no need to force the end consumers to use them. In the case of INTC/RMBS the market is clearly telling them that neither producers nor users view their "product" as a must have item. It appears that INTC is attempting to push DRDRAM for the price "insensitive" workstation segment, but will try to protect its PC, mobile and Server market share with the SDRAM chipset. This was the same approach it used for the PIII following the i820 failure. It did a "great" job of protecting their market share then and I don't see anything to change the results now. INTC is beating its head against the wall of commoditization. It appears that they have begun to believe their clever idiot TV ads and actually believe that their product is a differentiated "must have" for their clients, instead of the fungible commodity it really is. In truth the only thing the computer market "must have" from them is their production capacity. If they keep this up, they will one day begin to lose that capacity, as well as market, share to AMD. Imagine 80% of all dairy farms controlled by a single corporation which trys to "market" chocolate milk as its only milk product. To accomplish this they trot out a series of ads with heavy metal jingles and cows with brown faces. Then they set the packaging guys to work spinning out chocolate milk "Sports Drinks", caffeine laced chocolate milk "coffee"; hot chocolate "tea"; and even go so far as to develop marshmallow and strawberry flavored "corn" flakes and shredded "wheat" to enhance the "creamy deep mocha Breakfast Drink" with which they are flooding the market. Will they sell more high margin chocolate milk? No question. Will they keep that 80% control of production? Not for long. <Ho Ha 8-> Granted INTC/RMBS clientele are a little less discriminating than your average milk buying parent - or perhaps its just the relative advertising effectiveness of "mimes" over "cows?" - in any case the difference seems to be one of degree rather than type. <Hoo Ha 8-> If INTC's 64bit entry fails to outperform AMD's on Legacy and 64bit sftwr, may God have mercy on their workstation "segment."<vbg> 0\|0