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To: Jonathan Bird who wrote (7872)	1/21/1998 12:03:00 AM
From: Eric Yang	Read Replies (2) \| Respond to of 213173

Eric, that the NC does not have a hard drive is the whole freaking point, if I may be so blunt. If it did then it would be something akin to Microsofts NetPC concept. And as you stated, it makes things 100 times easier to have local storage. This illustrates the change of paradigm that needs to take place before the NC can thrive. Jon, I got a good laugh out of that one. It just seems to me that all the hardwares rumored to be included on these NCs make it rather hard to believe. The numbers simply don't add up and I suspect that many of these features will not be in the actual product. Until we know the final specs and price for these NC's it's hard to figure out what kind of market ORCL/AAPL are trying to target. Are they catering to the enterprise/educational market or to the general home consumers. Enterprise/Educational market The NC server-client concept certainly fits into enterprise and educational enviroments well. The low cost and easy maintainance pays dividents here. The network is often already in place so there are no major hurdles. (Doren, these NC's could turn out to be great for Network gaming) Home consumer A network is the prerequisite for NC to work in a server-client environment. Since over 90% of the US population still don't have cable modems or DSL I doubt anyone here believe the NC can become popular under the server-client model. It'll take at least 2 more years for these high bandwidth networks to become popular and reach critical mass. At the mean time, if ORCL/AAPL wants to sell these NCs to the average consumers they will have to include local storage. NCs will essentially be a slim personal computer. It'll work like your typical personal computer and consumers will compare them with other personal computers. One of the benefits that we might see when NC starts to ship in volume is that it may allow the price of PowerPCs to drop. Initially it may compete with Macs for supply of chips but if the demand for NC is sustainable both MOT and IBM will be producing PPC in higher volume and benefit from economy of scale. Currently PowerPC chips are about 1/4 the size of Pentium IIs. Theoretically that means they should cost about 1/3 to produce. However because Intel has higher volume it is able to offer its chips at fairly competitive prices. With the curse of lower volume, each PowerPC chip bears a higher percentage of the total PowerPC developement cost. And since IBM and MOT are the only suppliers of PowerPC they have very little incentive to lower prices on these chips. Hopefully NC will allow AAPL to benefit from lower prices on PPCs even if NC itself doesn't provide AAPL with much margin. Eric