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To: Yogi - Paul who wrote (2728)	3/9/1998 6:34:00 AM
From: Pierre-X	Respond to of 9256

Re: Abelson Barrons article He said that Bill Fleckenstein said: Let's say market penetration in PCs reaches the 90% level nine months hence. With the average selling price half of what it was when penetration reached 45%, a reasonable inference is that unit growth will be accompanied by virtually no revenue growth. Well. Let me put on my bull hat for a moment, to point out the specious reasoning in this little gem here. Error #1: He forgot to mention that PC penetration was 40-40% in the U.S. which is way ahead of all other nations. World PC penetration is about 1%. Error #2: If ASPs are halved, and PC penetration doubles, what happens to revenues? Answer: this is an unsolvable equation set. PC penetration merely measures the proportion of households or individuals or whatever with PCs. Down the road, PCs per capita will only increase. How many PCs do YOU have at home? (I have 6, including two junkers that arent hooked up.) Revenue changes resulting from price changes depend utterly on demand elasticity, which isn't mentioned here. Oops, is that Abelson's credibility I hear swirling down the toilet bowl? I couldn't resist the opportunity to rip on the oh-so-respectable Barron's. <GG> God bless, PX (come to my newly remodeled) w3.to