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

To: Gary Ku who wrote (5058)	6/25/1998 5:48:00 AM
From: Rachel M. Kuecks	Read Replies (1) \| Respond to of 93625

So the big companies are going to invest hundreds of millions of dollars to develop an alternative to RAMBUS which will reduce costs by 1.5% plus or minus any efficiencies/inefficiencies in the alternative design. Then they will give this investment away to their competitors in order to establish this design as a new industry standard or their competitors will be willing to license this technology because they would rather pay another DRAM company than Rambus. Alternately, the cash-strapped industry will collude on the development of the new design (see consortium) in order to do what is in the collective best interest of the industry. Evidence of such collusive behavior is evident in the stable DRAM pricing (no price wars or predatory pricing because it would not be in the best interest of the industry). If I was involved in an industry consortium, I would be spending a lot more time on supply/pricing issues than I would on 1.5% royalty fees especially since they already have paid for most of the development costs and are committed anyway. There may/will be competition but it won't come from a DRAM manufacturer. The biggest risk to RAMBUS is INTEL (which is also their biggest asset). INTEL can sink RAMBUS by endorsing another standard which is what may ultimately keep RAMBUS from getting too successful but if RAMBUS is able to diversify enough into other applications and INTEL's interests are aligned with RAMBUS's interest then we could have a compelling success story.