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To: Keith Hankin who wrote (17989)	3/9/1998 3:59:00 PM
From: Reginald Middleton	Read Replies (1) \| Respond to of 24154

<Even if Sun had dropped prices a lot earlier, it would not have gained PC converts. At best, it would have kept existing customers and gained some converts from competing UNIX vendors. That is my point exactly. Sun is in defensive mode now, or at least they should be. Sun's low and mid level machines really don't have much advantage over the higher powered PC's. They need to divert R&D into developing more for less. Whether they like it or not, commoditization has come thier way. That is why Compaq, Dell, MSFT and INTC will demolish companies that don't accept this fact and act on it early on. <But I suspect that this would have been done at the expense of overall revenue growth, and in the end still leads to the same end.> Teh reduction in overall revenue growth is an investment in the future. it buys Sun time to alter its product mix. Something which it seems unwilling to do for fear of what people would say if they invested ex. reduce revenue or profit margin. The sad part is they had to dramatically reduce prices anyway, but they did it after significant damage was done. Preventive medicine always tastes better.