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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: Ralph Bergmann who wrote (1450)	1/29/1998 12:41:00 PM
From: Mitchell Ryan	Read Replies (2) \| Respond to of 16960

Ralph, Most of us who have been on this thread since inception, have heard arguments such as yours over and over again ad nauseum. First, the argument that video chips will ultimately all be integrated onto the motherboard is ludicrous. Video technology moves too rapidly in order for this to be feasible. Very few OEMs integrate video onto the motherboard for this reason, since the risk of obsolescence is far too great. If it were feasible, Diamond, ATI, Matrox, etc. would all have been put out of business years ago. Second, the argument that quality and performance are immaterial and price is the only criterion customers use to make purchasing decisions is again ludicrous. If this were the case, S3 would be THE leader in 3D with the original Virge chip. Similarly, why isn't Intel out of business by now? AMD and Cyrix have cheaper processors that run the same software. Maybe instead of learning from the mistakes of others, TDFX has learned from the success of others. By all accounts, Intels branding strategy, which they started in 1989, has been a tremendous success. Do you think the "Intel Inside" logos are simply for decoration? Are the "3dfx" logos on many of the game boxes simply for decoration? I think not. One thing you are right about though. You personally should not hold this stock for too long. If you are not comfortable about your investment decision, then by all means, close your position. Good luck, Ryan

To: Ralph Bergmann who wrote (1450)	1/29/1998 11:34:00 PM
From: Marketeer	Read Replies (2) \| Respond to of 16960

3Dfx's Prospect Ralph and all, I used to share the same belief regarding 3Dfx's longevity and staying power based on their add-on approach. I'd take a good 2D/3D solution over 3D add-on any day, and was an early adopter of S3's Virge offering. (Boy, was I disappointed!) I didn't think proprietary API like Glide would succeed in the presence of Microsoft's DirectX. Several things changed my mind since. First of all, Glide support seems to be increasing by leaps and bound. Much more than I ever imagined possible. Glide-enhanced games ARE the primary reason for 3Dfx's good fortune. They attract buyers, period! I own two STB NVidia-based Velocity 128, and I can't wait for the VooDoo 2. I don't consider myself to be a hardcore gamer by any means, but I do enjoy eye candies, especially 3D's. Whether 3Dfx can keep up and further entice the developers depends largely on their ability to deliver ever faster, more feature-rich hardware with native API and to expand into the mainstream market. The preponderance of DirectX and the emergence of OpenGL in Win95 will challenge 3Dfx's proprietary approach, but both factors are not unassailable. The key will be their speed of delivering superior product and expanding their marketshare. Blitzkrieg baby! Lastly, there is Intel. With their i740, they seem poised to take the graphics chip market by storm. I presume they will hold the price advantage, but what about performance? For 1998, they could at best assume the combined roles of both S3 and NVidia - "low cost" supplier of reasonably GOOD 2D/3D solution. Bear in mind though how Intel prices their Pentiums in relation to AMD and Cyrix CPU(s). This is where Banshee will run into the Maginot Line, seemingly armor-proof. But Glide support may very well provide 3Dfx with the panzer divisions it needs. To race to Paris successfully, Banshee must AT LEAST provide good 2D and higher than VooDoo 3D performance and sell for comparable market price. Are you a believer? I am cautiously becoming more of one everyday. There are RISKS! Everyone should know that. In the meantime, I am looking to buy back in after selling yesterday. Down, down, I say! I love those MM and the uncertainties :)