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

To: Rational who wrote (5305)	11/1/1997 5:40:00 PM
From: uu	Read Replies (2) \| Respond to of 64865

Sankar: You state: > If you consider SUNW as the Coca Cola of the computer > industry, then its price will be simply a little bit higher than $34 if you > want to accord SUNW a P/E of 33.9417.21/31.36. With all due respect I fail to see the connection here.Perhaps you misunderstood me. You brought up the question of competition that Sun will be facing with IBM, and HP. I simply tried to say that certainly there will be competition. However the ones with the brand names, perception of quality and leadership will always out run the competition. In addition to that the demand will be so huge everyone will be able to make money in this huge uncharted market. And as an example I brought up Coke, Pepsi, 7UP, and Dr. Pepper, which all compete in the beverage industry. Regardless of what Dr. Pepper, 7UP, or pepsi do, when you go buy a soft drink most of the time the only name that first comes to your mind is Coke. There was no intention of comparing P/Es, or stock prices. Surely you agree that beverage industry is completely different than the server* market! Regards, Addi Jamshidi

To: Rational who wrote (5305)	11/2/1997 1:13:00 AM
From: LKO	Read Replies (1) \| Respond to of 64865

> The precipitous drop in the share price of SUNW appears to be linked > to JAVA not producing much earnings for SUNW (this was not known to > the WS until the contract was made public). The drop brought SUNW to > the level of IBM's P/E. > Who knows what it is linked to, but if Wall street thought "revenues from Java license" was the business model, then they just don't know how to inhale high technology trends. Windows ABI is a proprietary/de-facto standard and Java is threatening to create an alternative to it. It enables a new market where there can be competetiion and alternatives for desktop. Just the way IBM created the PC/DOS market which grew up to me the Windows market. Sure IBM lost control of the software side (if it ever did have). It lost on the hardware side but we have CPQ, DELL, GTW from the economy created by it. Sure Sun can try to compete and lose in the "Java market" (if it happens) to HWP, MSFT, or whoever. There are no guarantees. But to think the the potential of Java to Sun's revenues is because of the license fee, is to not understand enabling and creation of a new competitive market. If "license revenues" was the business model, Sun would not be working hard to give it away to a standards body (with some strings so that the saboteurs don't use the standards process to destroy/delay its potential). Maybe there are now new question marks on the potential for that new market and the "sabaoteurs" have gotten to it by creating a warped Java in IE and the legal system and that represents a risk to the enabling of that new market. But license revenues is not the game. The IP protocol is not "owned" by anyone. No one makes license revenues from it but it enables the market of all the companies making money from the internet (router companies, computer companies, phone companies) and maybe some that will make money in future (retailers...etc). > I still consider SUNW's current price as fair, and not a result of > "idiotic" selling. That may be true. But it was not because WS is shocked to learn that there was no license revenue stream from Java licenses (atleast I hope the analysts are smart enough to atleast know that..but one never knows). I think Sun is undervalued right now and I attribute zero value to the Java potential. If that happens, it is a freebie. Just the "Internet classic" (without Java) has enough momentum to create demand for servers. Yes NT and Wintel will be competition but I believe Sun can compete. I hope it is not putting all its R&D investment in the Java basket and looking after traditional Unix and server market too.