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

To: Carmine Cammarosano who wrote (6647)	1/11/1998 8:49:00 AM
From: Holger Johannsen	Read Replies (1) \| Respond to of 64865

Carmine, I agree and disagree with you. The local expenses are indeed lower but what about the component and manufacturing costs. These costs are my main concern. Sun never stated in detail where their main components are coming from. I already asked the question on this board and Addi pointed me to a certain part of the annual report (page 21) where they make vague statements about their foreign manfacturing. We know that Dell did already say they will profit greatly from the currency devaluation in Asia but we don't know that of Sun. If indeed their components mainly come from Asia I won't be worried but if not it spells like a potential problem to me. I see the same problem arising in Europe. Sun manufactures their systems in Scotland if I remember correctly. Unfortunatley, the British Pound skyrocketed last year against all major European currencies (I paid DM 2.35 last January and now have to pay almost DM 3.00 per Pound). This situation might get worse with the arrival of the European Monetary Union. And if Sun only hedges six months forward we may see the real results of this situation in the current quarter. Don't get me wrong, I'm long on Sun and will continue to do so, but this currency situation is getting worse every day and I better understand why and how the companies I'm long on will weather this storm. Holger