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To: Francis Chow who wrote (58636)	6/24/1998 10:54:00 AM
From: Darren	Read Replies (1) \| Respond to of 186894

How so? Historical P/E is 15:1. Revised estimates around $3.00. Even at a P/E of 20:1 that gives a price of $60. It's not rocket science. Because this quarter, I'm expecting an upside surprise of $0.79, and a year at about $3.50. I also think the second half of the year will be better than that first half was, with Win 98 out tomorrow, and cheaper Pentium prices balanced by higher volume...

To: Francis Chow who wrote (58636)	6/24/1998 11:01:00 AM
From: otter	Respond to of 186894

Input from the perspective of a person who controls workstation procurements and upgrades.... We are not unlike a number of other companies. Because of that, what I am faced with now is what others are faced with as well. 1. @3 years ago, Win95 was announced. It required more gas than 486 systems could deliver and drove a serious round of upgrades which, frankly, peaked last year. 2. The current install base is a mismash of systems, many of which have relatively small disk drives, not a lot of memory, and a processor which by today's standards, is underpowered. The street value of these systems is around $500 - monitor included. If we are going to install and use Win98 and Office 97, we have two choices: Upgrade the existing installation base or purchase new systems. If we upgrade, we can expect to spend in the neighborhood of $500-700 per system in hard $ (memory, overdrive processor (an intel product, by the way) and perhaps either a larger or a second disk drive) plus the labor cost to make that upgrade. And, at the end of the day, we will have extended the useful life of the system by - oh - a year - maybe? And the street value of the system after the upgrade will still be roughly $500. Some shops will go the upgrade route because cash flow is a key driver. Others will purchase new systems because they have capital to do so. The point of this is that Asia, turmoil in the market, and the other externalities aside, the longer term trend is what it is, and there is a market driver staring you in the face today. (we will take both routes. Upgrading systems for lighter users and purchasing new, replacement systems for power users)