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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: cheryl williamson who wrote (43560)	5/30/2001 11:22:30 PM
From: THE WATSONYOUTH	Read Replies (2) \| Respond to of 64865

IBM is currently offering prices that are too low. They can't continue to do that for long. They do it because they are desparate to grab some of Sun's marketshare. Too low? Too low for who?? Too low for Sun to compete?? They can and will continue it indefinitely. I think the pricing pressure is just beginning. With Itanium launching and McKinley on track for next year, all the UNIX vendors know (maybe not Sun) that the incredibly fat margins they enjoyed on these systems will over time erode or market share will be lost. IBM's UNIX revenue increased significantly last quarter. Even overall company revenue increased about 10%. EPS growth looked good. IBM doesn't absolutely depend on UNIX hardware sales as Sun does. To gain market share, they can and will lower prices to levels that will kill Sun's margins. I expect POWER 4 to launch before year end. I believe Sun has not yet released the new USIII high end systems. I originally thought Sun would have a 9-12 month lead on POWER 4 introduction. It now looks like they may be concurrent. I fully expect Power 4 systems to outperform Sun systems by a wide margin and to cost less. I think the pricing pressure will then be increased. Sun's task will only get more difficult. Their problems go way beyond just an overall IT spending slow down. THE WATSONYOUTH