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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: TEColeman who wrote (3892)	4/22/1998 12:47:00 PM
From: Ibexx	Read Replies (1) \| Respond to of 93625

TEC, re.But I'm certainly losing now that I've gone long The easiest thing for you to do is to sell your RMBS now--why bother convincing yourself of keeping it? My own guiding principle has been: when in doubt, get rid of it! Regards, Ibexx

To: TEColeman who wrote (3892)	4/22/1998 1:55:00 PM
From: Shibumi	Read Replies (1) \| Respond to of 93625

>>Its looking like the Betamax vs. VHS battle again. Superior technology loses to cheap and dirty.<< You use a fascinating analogy. There have been several studies in the last few years that showed the Betamax versus VHS battle came down to a conflicting set of consumer key purchase criteria: Betamax: Superior Picture Quality VHS: Superior Taping Time In these reports it's stated that VHS won because customer's cared more about taping time than they did picture quality. Now...on to Rambus. It would appear that there are two conflicting issues associated in the long-term with RDRAM and SLDRAM, to wit: RDRAM: Performance SLDRAM: Cost The question one might ask is which is more important. Let's imagine this case: that SLDRAM will always cost less and RDRAM will always have higher performance. Then we can look at several constituencies: o Customers: Depends on the cost differential, but let's imagine that cost wins out. o PC OEM's: Let's imagine that cost wins here too. o Intel: *DESPERATELY* want performance. And here's where you have to make your decision on Rambus -- the inherent value you place upon Intel's backing of Rambus and Intel's desperate need for additional memory performance. I place a rather high value on this, which is why I decided the company was worth buying. Why is Intel so desperate to get higher memory performance? Today, Intel is being constrained in their usual "move people toward higher performance" higher margin motion. The root causes of the constraint are: 1) Microsoft in the last few years had to quit focusing on pure feature content and instead focus on the Internet. 2) Disk performance. 3) Internet access performance. 4) Memory performance. Microsoft has already been taking the wraps off various pieces of software (e.g., Chrome) which require 450MHz processors and above. In addition, there appears to be concerted effort within Microsoft and other companies (including Intel) to decrease the information transmitted between servers and clients on the Internet. Disk performance is also slowly getting better. With the tremendous increase in number of bits shipped, caching of both the disk and internet access has really taken off. But therein lies Intel's problem -- that processor performance is governed by Moore's Law while the interconnect to memory and memory itself increases in performance at a much more normal (and thus slower) rate. Thus, if you're at Intel, I believe that you'd make a decision that you'd do whatever it takes to make RDRAM -- or some other technology which offers equal or better performance -- win. For Intel's perspective, they'd love it if SLDRAM could compete and win. After all, Intel would like memory prices to be as close to zero as possible and for that "free" memory to be as fast as the microprocessor itself. Unfortunately, SLDRAM it's a short-term kludge. Does any of this mean that Rambus won't go down into the $30's, or $20's, or whatever? Absolutely not. But from my perspective, until I see the fundamentals change, I'll use these drops to buy more.