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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: Andrew Kruh who wrote (3622)	6/1/1998 1:35:00 AM
From: Matt Webster	Respond to of 16960

Retail data point: I was just in Best Buy in Mercer County, NJ. They carry the 8 and 12 MB versions of the Voodoo2 board from Diamond and Creative. The 12 MB boards were sold out, as was the 8 MB Diamond Monster 3D II. The only board in stock was Creative's 8 MB board and was priced at $229 with a $30 rebate ($199 net). They also had the original Monster 3D and it was priced at $129 with a $30 rebate ($99 net). We are now two months from introduction and the retailers are still having a hard time keeping things in stock. Also, it looks like maybe the price competition between Diamond and Creative is driving prices down from $250 initially to $200 currently. Either that, or the general worldwide collapse in DRAM is accountable for the price. At any rate, 3DFX continues to be the chipset that retail customers want. They had plenty of Riva 128ZX Velocity 128 boards in stock. As much as I want Banshee to be a success, I think retail gives a better indicator of popularity and future leadership. Most OEM sales are by unmotivated users, while retail sales are by people who actually want a specific thing. Since it is the same people who buy the video card retail who buy all the games, I think we will have good support for 3DFX into the next year. The bottom line is that strong retail sales means that TDFX can grow at a huge rate, with or without the success of nVidia and the Riva TNT. This is not a zero sum game between nVidia and 3DFX. If Banshee is great, we'll show awesome 3Q and 4Q calendar earnings. If it's so-so, we'll show great revenue and earnings increase. If it's mediocre, we'll show improved earnings and revenue. Banshee is the icing* on a tasty cake.* Now, if we could just have a moment of silence for poor Rendition and (one of) S3 and ATI. Matt