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To: Elmer Phud who wrote (178223)	5/30/2004 11:46:54 AM
From: The Duke of URL©	Respond to of 186894

The Register » Enterprise » Servers » Itanium and Opteron show spotty sales By Ashlee Vance in Chicago Published Friday 28th May 2004 03:14 GMT Like Macaulay Culkin after the reality of puberty set in, the Itanium and Opteron processors are suffering from growing pains. Try as they might to conquer the server market, the 64-bit processors from Intel and AMD have yet to show serious gains. The latest server data from Gartner shows that only 6,281 Itanium boxes and 31,184 Opteron boxes were shipped in the first quarter of this year. Together, Itanium and Opteron servers accounted for 37,000 of the 1.6m units moved in the period. Just how bad is the state of the pubescent Itanic? Think of thriving acne with an outside chance of cleansing. The good news for Intel is that the 2004 first quarter sales were well above last year's total of 1,255 Itanium servers shipped. Along with higher unit sales, revenue also surged from $38m to $282m, according to Gartner. That puts the average sale price of an Itanium server at about $45,000 - a midrange box. The bad, face-scaring part of that total is that it makes up only a fraction of the $11.8bn in servers sold by all vendors. So if all Itanium vendors do make up an "ecosystem" as Intel likes to say, it's an ecosystem not much bigger than the grotty vegetable crisper in an undergraduate's fridge. For Opteron, the story is a bit brighter. Think sporadic breakouts controlled by Clearasil dips. AMD's Opteron processor accounted for $93m in total Q1 server revenue. Gartner does not have year-on-year numbers for Opteron, since the chip arrived after the first quarter closed in 2003. The 31,000 units aren't bad, but they hardly match up to the more than 1m Xeon servers shipped in the quarter.

To: Elmer Phud who wrote (178223)	5/31/2004 9:54:45 AM
From: GVTucker	Read Replies (2) \| Respond to of 186894

elmerp, RE: Like you, I am less that persuaded that the BS model is anything more than a rough estimate in the absence of a crystal ball. Statements like that are indicative that you don't understand Black Scholes or the option expensing argument. Black Scholes is not intended to be a predictive model. It doesn't tell you where an option will be when the employee exercises the option. That's why this whole discussion that you and Lizzie are putting forth is irrelevant. Black Sholes is inteded to value the option when it is granted. That is the most relevant thing to accounting because we want to know how much the employee is being compensated when he/she does the work, not when the option is exercised. THAT is the trade off, granting an option versus paying the cash. Advocation of things like the cash basis accounting, which you and Lizzie are implicitly doing, would set back financial statements decades, if not centuries. Like TA, it's perfect at telling you what happened but lacking in telling you what will happen. Nothing will tell you what will happen. Grant somebody stock, it is expensed at the value of the stock AT THAT TIME. If the employee chooses to sell the stock later at a higher or lower cost, it shouldn't, and doesn't, impact the company's financials. Same thing with options. The option should be expensed AT THAT TIME. If the option subsequently increases or decreases in value, it shouldn't affect the company.