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

To: tinkershaw who wrote (74935)	6/25/2001 10:51:02 PM
From: Skeeter Bug	Respond to of 93625

>>This scenario also destroys much of the software industry which relies on consistent product upgrades. If they can't keep creating the need to upgrade, and under your scenario they will not be able to, these software companies are also in a world of hurt.<< pc / software growth has been collapsing for several years now. isn't msft in the mid single digits? they used to be 40%+ guaranteed. the net bubble delayed the day of trouble, but in doing so, they turned trouble into disaster. >>A very large shakeout is afoot. As much as Bilow may hate to admit it, the evidence is there. Those DRAMs that bet against RDRAM are being shaken out. Perhaps someone could be so kind to put side by side the positions of the RDRAM firms: Samsung, NEC and Toshiba vs. the DDR firms: Micron, Hyundai and Infineon. There could not be a greater contrast in financial stability between the two camps.<< one might say that those companies with money to burn invested big rdram ;-) >>If Bilow wants to stick with his story that is fine. But due to the very high fixed costs of the DRAM industry, firms like Micron, despite reporting large inventory build-ups for DDR, are still churning out DDR as quick as they can. As long as revenues exceed average costs, even if it is selling at a loss, it is the rational economic thing to do. It is also what leads to an industry shakeout.<< in economic terms, if the marginal revenue exceeds marginal costs - make the product regardless of the sunk cost. in this case, the sunk cost is HUGE. but ya know what? it is even more for rdram. i hate the dram industry as business for quite some time. i hate micron's touty management. however, i doubt the rdram guys are making back those billions of marginal dollars they spent to get rdram capability even if they are making more marginal revenue than marginal cost on each unit now. both camps are hurtin', imho. wrt bilow - i will disagree in that i think you have written off his analysis due to a distaste for his presentation. of course, bilow and i may be wrong. it seems just as obvious to me that rdram is a niche product as the internet would be horrible for business 3 years ago. the herd doesn't always like reality - and they have more dough than me! ;-) i think bilow's right on target. what causes the effect of a dram to take over the market place? bilow hammers on them. cost, industry support and cost. rdram had a HUGE jump and has lost it rather quickly with the moment in the rdram camp. imho, rdram will get routed by either ddr or sdram. we shall see. i appreciate your view, though. it is possible to disagree w/o being disagreeable. hey, if you are right about rmbs, i hope you make a TON! :-)