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Technology Stocks : PC Sector Round Table -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (563)	7/12/1998 3:23:00 PM
From: Pierre-X	Read Replies (1) \| Respond to of 2025

Re: Computing power; DSP; Integration I don't think that there is too much computing power speaking absolutely; merely that computing power has temporarily outstripped software demand. I have no doubt however that sooner or later a compelling value proposition will materialize to drive another generation or three power upgrades. That Intel has not been, as you say, more aggressive about assimilating additional functions is more evidence that they -- along with most of the rest of the industry -- were caught flat footed by the trend toward lower ASPs. Are you proposing that Intel might be wise to consider joining the ranks of PC-on-a-chip proponents? Would this not be another step on the road to the vertical integration that you've decried in the past? Some good could come of this. Intel's involvement in -- some would say domination of -- the motherboard business has resulted in much greater standardization and therefore predictability and reliability in the product. On the other hand Intel's track record of product innovation outside the CPU business is somewhat spotty; an Intel-PC-on-a-chip could be the doorway to PC decadence as competitors fall by the wayside and the spark of invention mothered by cutthroat-necessity dims. As you note, Whitney is evidence of Intel's lagged reaction to the "new" PC demand structure of cheap, cheaper, cheapest. Perhaps Gus' prognostications of $500 PCs may prove to be a bulls-eye. Certainly I would have no objection to putting Pentium power in a PalmPilot-sized package, that I can run on standard batteries and tote around in a pocket. This could also be a blessing of nation-promoting magnitude as serious computing power becomes available to the non-electric-powered masses. God bless, PX

To: Frodo Baxter who wrote (563)	7/13/1998 1:51:00 PM
From: Pierre-X	Read Replies (2) \| Respond to of 2025

Here's an article touching on the integration issue. Personally I think it's typical extrapolative baloney. --- Market for New Class of Integrated Products Will Total $1.6 Billion in 2000, Force Shakeout in Traditional PC Components Markets, According to New Report From Mercury Research SCOTTSDALE, Ariz. July 13 /PRNewswire/ -- The combined markets for traditional PC components like microprocessors, graphics accelerators, system logic and sound chips peaked in 1997 and will decline in '98 and beyond, according to Rearchitecting the PC, a new report released today by Mercury Research, Inc. The shrinking market is due largely to the fact that the dramatic shift to lower-cost PCs is forcing average selling prices for PC components dramatically lower. In 1998, component suppliers will ship $21.7 billion worth of processors, graphics controllers, chip sets and sound chips to PC suppliers. That figure is 4 percent lower than '97 shipments of $22.6 billion, according to data found in Rearchitecting the PC. The lower prices and declining markets are spurring investment in a new class of more cost-effective, highly integrated PC components -- a market that will grow to $1.6 billion in the year 2000, according to the report. Unfortunately for existing suppliers, however, the additional revenue generated by the integrated components will not be enough to reverse the decline in the market for traditional PC chips -- making a shakeout inevitable. ''The performance treadmill the component suppliers were on through much of the '90s is reaching a dead end,'' said Mike Feibus, a principal analyst at Mercury Research. ''With the high end of the PC market shriveling, chip makers can no longer profit by designing high-performance parts and riding them down the price curve.'' ''Going forward, the survivors will offer low-cost, highly integrated PC components which enable computers that are both attractive to buyers and profitable for suppliers,'' added Dean McCarron, also a principal analyst at Mercury Research. ''Now that the PC platform is stabilizing, integration is finally a viable avenue for achieving lower cost and higher performance.''