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

To: Big Bucks who wrote (18054)	3/21/1998 10:44:00 PM
From: Richard Ruscio	Respond to of 70976

BB, The impact of another 800M PC's drawing on the straw that is the net is beyond question. Let's do simple math, and assume 4x current capacity, and another double on top of that - 8x current installed hardware. LU, NT, CSCO and the rest will make a lot of money, if the current / next business models hold, no doubt. Digital video is indeed a hog. The issue will be how many of our billion pc's buy it and use it. Look at us - mid/late '90's, and we're trading text. Adoption rates will be slow, Moore's law will continue, and Intel needs the sales. Dual core, yes. Higher ASP's/CPU - I doubt it. 800MM cases, power supplies, and all the rest - sure, but lots / many / most / all of these 800MM will be sub-$1K. The profit per part is already small. Now, admittedly, 800MM times a small number is a big number, but it sure looks like marginal business (no brands, no premiums, lots of competition). I agree that the industry is waiting for this boom. I agree that AMAT, as the premier arms dealer in this war, will have successively more impressive booms and busts in a cyclical industry. What I'm concerned about is two things: first, the marginal utility of "storage devices" in our hands (which is what got me started)cause after all, how much do you need to keep if it's all "out there" already, and second, the available margins (case in point, what cpu price the set top squad are willing to pay). Regardless, AMAT makes money. Everybody else, well, I remain nervous. Thanks for the reply. rr