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Technology Stocks : Altera -- Ignore unavailable to you. Want to Upgrade?

To: Harold Engstrom who wrote (1496)	1/19/1998 1:09:00 PM
From: Matthew	Respond to of 2389

Hi Harold; I agree, knowledge of this release could have moved the stock. However, I do not believe justifiably so. Several points. Clear Logic is a very new unproven company. I do not think anyone is going to jump on this very quickly. One must fully appreciate a manufacturers' aversion to risk. The - if it is not broke do not fix it - mentality if very pervasive and rightfully so. Making substitutions like this requires a company to divert engineering resources to verify that a product continues to function as it originally did prior to making a replacement such as is suggested in this press release. In the industries that Altera serves it is widely accepted that the best ROI on engineering talent is on new products - not cost reduction alone. One of the major advantages of using FPGAs is that they are field upgradable. This advantage is lost when you do a conversion. As such only in very mature products would such a risk be taken. Finally, the most important reason why this release/product should not have a major impact is cost. While I cannot give you details to pricing per confidentiality agreements, I can will tell you this: for me, using these parts from Clear Logic would be more expensive than using the parts that they are trying to replace. If anything, parts like this may increase FLEX sales as companies that would not use FLEX because they cannot get the pricing of a CISCO may use FLEX knowing that they could get to Clear Logic pricing if their product is medium successful - not too successful of course as then they could just buy the FPGAs for the same price and not give up the flexibility of an FPGA. Bottom line - once again the uninitiated may have moved the price.