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

To: Tony Viola who wrote (10089)	2/23/1998 4:50:00 PM
From: shane forbes	Respond to of 25814

Yes that's the inevitable conclusion but that's the scary part I did not want to hear about. After all LSI is high end, CoreWare da da da... I think the implication (in as much as I don't quite like to admit this) is that they are taking a thrashing on unit pricing. Since I hope that their higher end stuff is not seeing as much pricing pressure as the lower-end stuff, the natural conclusion is that they are getting seriously thumped on the lower end stuff. I think it may actually be worse than even the above suggests since there likely is an increase in units shipped. In numbers: Let's say Base Pricing is: 10 units at $150. Now add in price erosion: 10 units at $130 Now price erosion + unit demand acceleration: 12 units at $130. ' ' ' Put it all together: Base: $15/unit Price Erosion only: $13/unit Price Erosion + Unit demand Acceleration: $11/unit. Now assume that the pricing pressure is only on the high end then the lower end pricing will show even greater pricing pressures on a % basis since the above is an indication of the company average - high and low end. High thus would show a decrease lower than 25% (so say 15%) and lower end would show a greater decrease than 25% (so say 35%). (Remember though that all of the above numbers are all pretty much bogus. Purely for illustrative purposes.) Thus a triple whammy... Serious price erosion and never never a good thing. The unit demand increases which I really hope has not reached a climactic point yet is not balancing the per unit price erosion.