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To: Geoff Nunn who wrote (48227)	6/19/1998 12:08:00 PM
From: MichaelW	Respond to of 176387

Is this a good thing for those with $85 puts/call options at 1pm, if the price remains at $85.

To: Geoff Nunn who wrote (48227)	6/19/1998 12:13:00 PM
From: jim kelley	Read Replies (2) \| Respond to of 176387

Geoff, Do you have any insight into CPQ's actual sales through to the end user? The units reported sold by CPQ were actually sold to the channel and many of them may have been returned. So we have no really accurate grasp of what their unit sales actually have been. It might be possible to estimate these sales by backing them out of the revenue numbers based on an ASP. Jack's post points to inventory swaps, returns and price protection payments being at a higher than current level. Regards, Jim Kelley

To: Geoff Nunn who wrote (48227)	6/19/1998 3:48:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Geoff in general terms I disagree with your assertion that ... market share is a zero sum game, and can be self defeating when prices are below production costs. But in terms of the computer business I wholeheartedly agree. The tacit assumption in seeking to increase market share in exchange for current profits is that future profits will be enhanced. But in order for this stratagem to work, one or more of three conditions must obtain. There may be others, but these are the ones that occur to me off the top of my head: 1. Customer brand loyalty must be high; 2. Switching costs must be high; 3. Competitors must be vulnerable to being pushed out of the business. In each of these scenarios the fight for market share is presumed to result in a permanent shift. I don't believe this is possible with corporate computer purchasers, although it may be possible with retail customers. For years Apple was able to capitalize on customer loyalty and high switching costs to good effect by seeking market share in the schools. Customer loyalty does not appear to be high in the computer industry. Because Intel cpus have become the de facto standard in the industry. That effectively eliminates the switching cost argument. So the only point could be to eliminate weak competitors. But I don't think the effect will be long-lived. There are simply insufficient barriers to entry into this market. Bottom line: I think you are right. TTFN, CTC