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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Teri Skogerboe who wrote (17006)	3/4/1998 1:10:00 PM
From: Clarksterh	Respond to of 70976

Teri - My question relates to the idea that IF the PC makers are able to hold the line on margins at all (even close) then they are probably (?) cutting corners and components, meaning lower numbers of chips and the chips that are there are less high-end. Is this bad (using less high end components)? Far from obvious. If they sell twice as many computer but at 2/3 of the price and with the same margins, then they are still growing revenues and earnings at 30% per year. Whether the new cheaper computers is good or bad depends entirely on the supply/demand curve, and the determination of that curve is something that marketing firms and economists are paid big money for. I certainly do not have the answer, but here are some thoughts: 1) The new trend to cheaper computers causes households to buy more than one. (Remember in the 50's people laughed at the idea of having more than one TV) This would open up growth in the US substantially. 2) The lack of killer apps for the next generation of machine causes no one to want to buy top end machines, or to upgrade their system. When I moved from my 286 to my 486 it was an absolute necessity. The move from there to the P-II is not. Thus the upgrade cycle is prolonged. This would slow growth substantially. 3) As machines become really cheap they will get used in places never before colonized (The Windows CE market - cars, stereos, ovens, ...). 4) As machines get cheaper, markets outside the US will open up. Europe, for instance, is nowhere near as saturated as the US. ... Whether 1, 3, and 4 outweigh 2 is a guess at this point. I suspect that they will, but there might be some transitionary hiccups as the PC industry moves from one growth model to another. Clark

To: Teri Skogerboe who wrote (17006)	3/4/1998 2:32:00 PM
From: BelowTheCrowd	Read Replies (2) \| Respond to of 70976

Teri, Not quite true. Today's $1000 PC contains a lot of the same components that went into a $2000 PC a year ago. The components are just a lot cheaper now. So we are not "cutting corners", rather we are "mainstreaming" PCs which in the past probably would have been considered "obsolete" by the major manufacturers. Think back a couple of years to the point when Pentium was mainstream. You could always find somebody to sell you a "good enough" high-end 486 for a few hundred bucks. Today the top end is moving towards PII and K6 machines at high speeds and with huge disk-drives. So for under a thousand dollars you can buy a P166 or P200 with a 2GB drive, effectively the same PC I bought for $2500 just 18 months ago. This is mostly market growth. It comes from the realization by major manufacturers that there are a lot of people who are happy to have an "older tech" PC for a lot less, and does not necessarily cut into the demand from experienced users who still want the "current tech" at $1500-2000 pricepoints. This is partially internet driven. It doesn't take a whole lot of power to run a browser, so there is an increasing number of people who don't need a real "current generation" PC but still want more capability than a WebTV box gives them. How this shakes out for the semi and equipment manufacturers in the long run is still a bit unclear. mg

To: Teri Skogerboe who wrote (17006)	3/4/1998 9:26:00 PM
From: Paul V.	Read Replies (3) \| Respond to of 70976

Teri and Threaders, Find the BP for this week and the last week. You can see that the market is getting very high with the sectors getting in the oversold area, above 70% area. However, the 10 wk moving average did not reverse down like I thought it was going to do but continued to move up. Until we get a reversal in the 10 wk moving average this market appears to be moving higher. CNBC analyst were projecting a DOW of 9000 the middle of 4/15 thru May and another analyst stated 92-9400 buy June and July. Naturally, the above is only my opinion and the data which I have reviewed from the Dorsey Wright site. Reader are reminded the old saving, "caveat emptor (buyer/reader beware)." Any thought? Paul SECTOR Percent SECTOR Percent SECTOR Percent 2/17/98 2/24/98 3/3/98 bpeuti 89.6 bpeuti 89.6 bpeuti 89.4 bpbank 80.7 bpbank 80.1 bpintl 88.31 bpsavi 80.6 bpsavi 80 bpsavi 81.2 bpguti 76.7 bpguti 76.7 bpbank 80.1 bpreal 72.7 bpreal 72.2 bpwall 80 bpinsu 69.9 bpinsu 71.5 bpguti 75.7 10week 69.08 bpmedi 69.3 bpnyse 73.37 bpmedi 67 bpwall 67.3 10week 72.88 bpwall 66.79 bpsemi 66.1 bpinsu 72.7 bpsemi 66.1 10week 65.81 bpreal 71.7 bpfina 64.4 bpfina 65.8 bptrans 71.11 bpnyse 64.1 bpnyse 65.4 bpmedi 68.4 bpfore 62.7 bpreta 64.3 bpreta 68.3 bpaero 61.4 bpaero 63.6 bpsemi 68 bpreta 60.9 bpfore 63.5 bpmach 67.23 bphous 60.4 bpbuil 62.3 bpfina 66.7 bpmach 60.2 bptrans 62 bpotc 65.92 bpbuil 60.1 bphous 61.3 bpaero 64.8 bptrans 60 bpmach 59.8 bphous 64.3 bpintl 58 bpotc 59 bpfore 62.3 bptele 57.7 bptele 58.9 bpbuil 62.3 bpotc 57.7 bpintl 58 bptele 60.2 bpchem 55.6 bpelec 57.1 bpchem 60 bpsoft 55 bpsoft 55.9 bpsoft 59.7 bpauto 54.8 bpchem 55.6 bpfood 56.8 bpelec 54.6 bpgame 55.6 bpauto 56.6 bpbusi 53.4 bpfood 55.2 bpelec 56 bpgame 52.8 bpbusi 54.4 bpdrug 55.9 bpdrug 51.9 bpauto 53.8 bpbusi 55.5 bpcomp 51.2 bpdrug 53.7 bpcomp 54.8 bpfood 50 bpcomp 52.8 bpgame 54.5 bptext 48.6 bprest 51 bptext 52.8 bpmeta 48 bpmeta 50 bprest 52 bprest 46.9 bptext 47.7 bpmeta 50.7 bpwast 46.6 bpleis 47.2 bpoil 50 bpoil 46.2 bpoil 47.2 bpwast 49.5 bpheal 44.4 bpwast 46.7 bpoils 49.5 bpstee 42.7 bpheal 44.2 bpleis 48.5 bpbiom 42.6 bpbiom 42.4 bpheal 47.6 bpleis 42.5 bpstee 38.7 bpstee 44 bpoils 38.4 bpoils 33 bpbiom 38.2 bpprec 37.3 bpprec 30.9 bpprec 31.51 bplati 30.8 bplati 28.8 bplati 30.8