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

To: Michael Dean who wrote (499)	4/24/1998 10:37:00 AM
From: David Kuspa	Read Replies (1) \| Respond to of 777

Pinnacle seems to be the NLE competitor to beat this year. Their ReelTime and DC50 products have a feature set that I haven't seen anyone able to match for $5k and $2k respectively. A year ago, who would have thought that Pinnacle (PCLE) would come back as strong as they have? Now there's a legitimate reason for a stock to go from $10 to $40 in the past year. Their last quarter had over 300% higher revenues year-to-year, up 5% sequentially from the previous quarter. They aren't using the seasonal excuse or pre-NAB argument. With their new price and feature leading cards coming out this quarter, along with post-NAB orders, they have a good chance at a very strong quarter. Media 100 is still floundering, having announced that most of this year will produce high R&D expenses and flat or negative results as they struggle to bring out NLE systems on the Wintel platform. Once a serious and powerful threat to Avid, they're now being compressed further into the middle of the market, being hurt by lower-end products which are catching up with their qualtiy and feature-set, and still getting killed by Avid at the higher end. Now that Apple has released QuickTime 3.0, a host of new desktop video products have instantly gained platform independence (Wintel and/or Mac) in content creation. And QuickTime 3.0 offers powerful features that are easy for developers to take advantage of, since it does most of the work and provides all the hooks in its Media Layer. If you do not know much about QuickTime 3.0, I urge you to learn the details. This software is clearly the most important development in desktop content creation in a very long time. It can translate and work with almost every type of visual and audio file out there with cross-platform compatibility, and is resolution-independent, even up to that of film. QuickTime 3.0 brings universal access and a single standard to the Tower of Babel that we have built with a myriad content file formats. It has also been chosen for the upcoming MPEG 4 world standard. The reason why proprietary systems from Avid, Panasonic, D-Vision, etc. have done well is that getting high-quality video to work well on the desktop has been very difficult until fairly recently. Now that we have better video cards, and much more powerful CPUs along with higher-speed busses, the barrier to entry has been lowered significantly. And QuickTime 3.0 is helping to push that barrier even lower. The real growth in desktop video will be in cheap, flexible, specialized software utilities that use QuickTime 3.0 to work their magic. Generic video cards that can compress MJPEG or use the digital DVC codecs will continue to come down in price, along with the host computers and hard drives that form a complete desktop system. This is the way desktop publishing went, then digital audio/music production, and now visual content creation. I just believe that the "black box" and proprietary systems are going to be hurt most in the coming years, facing an army of smaller competitors who offer the desktop content creator a swiss-army knife approach to their specialized needs. That's the way the graphics, photographic and CDROM content creation markets have gone. Avid will continue to have its place at the higher end of broadcast and feature film post-production, but I just don't see how they're going to generate eye-catching revenue growth going forward. As always, do your own research, D. Kuspa