Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Diamond Multimedia -- Ignore unavailable to you. Want to Upgrade?

To: Jonathan Quick who wrote (3514)	3/26/1998 11:10:00 PM
From: PACKRATCAT	Read Replies (2) \| Respond to of 4679

Ok Jonathan I'll ask you, and the others, for some advice. I am overweighted in Diamond based on dollar value and am thinking of selling more than half of the shares in the near future. Would you suggest selling before the next earnings release or wait for the results to be announced? Any comments are appreciated. Thanks, Matthew

To: Jonathan Quick who wrote (3514)	3/27/1998 1:12:00 AM
From: lml	Respond to of 4679

Jonathan: Again, thanks for your response. Although we don't agree on all aspects of DIMD's business, we do agree on some & I do appreciate your comments. Here are some of my thoughts in response to your comments: Entry Level Systems: Who's buying these systems? Well, I believe they're are generally targeted at homes that presently do not have a PC due to cost. These homes couldn't afford to lay out between $1,200 & $1,500 for modestly configured PC. Intel & PC makers have now targeted this untapped segment of the PC market -- the low-end -- to spur new growth. Now what's gonna happen in let's say 6 mos. after this low-end PC enters the home? My guess is that its going to be used & used quite often, especially to access the Interntet. And the user is going to "get hooked." But he will soon become dissatisfied with the "bare-bones" machine he has purchased. He will seek to improve its performance in numerous ways. How will he do this? Upgrades, add-ons, etc. You get the picture. Here's the guy who cannot afford to go out & buy another computer every 1 or 2 years to keep up with advancing technology. He will want to build upon with what he has & there will be an add-on market to meet his needs. . . and budget. Upgrade at 50% of his entire system? Come on Jonathan. You know that this guy is not gonna spend $300 on a 12MB Monster 3D2 video card. First, you yourself have predicted that prices will drop. So the price of $250-$300 card today may be go for around $150-$200 in a year's time. But is this guy gonna buy the cutting edge? No! He's gonna buy older unwanted inventory that's slashed-down priced to get it off the shelves; we see evidence of this today. So, IMHO, what we're gonna see is a "secondary" market for this older inventory -- to be found in K-Mart type stores where the budget-consumer shops. So one can argue that these products will develop a second product-life cycle. Mixed Bag "Products intended for gamers and the rest of the consumer market aren't going to yield the type of margins they have in the past." Yea, I agree, but I believe I raised the issue of an increasing market size going forward. I don't have the stats, but I'd be interested to see how many video cards(all kinds among all producers) were sold in 1995 and compare it with ensuing years up to & including estimates of cards projected to be sold in 1998 & 1999. I gotta believe this market has grown significantly. Not only has the market grown, but the appetite for improved graphics & video has also grown. The emergence of the Internet is primarily responsible. So margins, IMHO, are not the whole story. Communications Products Can't argue with your assessment at the present time. Modems have become a commodity item. How can competing producers differentiate their products? I am UNknowledgeable of the prospects of ASDL modems. Won't this modem just be another commodity item & the market characterized as one with little or no barriers to entry?. Unless DIMD can develop a strategy to capture a large share of this market, perhaps supplying a top-notch OEM or 2 (a Dell or CPQ), it may not make sense for them to invest much in this market -- unless it is a loss-leader that provides them access to important vendors, OEMs, distributors, etc, that will serve the company in its other product lines. Modems have been nothing but a headache for these guys. Cable modems? Even scarier. Maybe they see a payoff with ASDL & future developments in network-based computing (NCA). Who knows?