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Technology Stocks : CYRIX / NSM -- Ignore unavailable to you. Want to Upgrade?

To: Joe NYC who wrote (28380)	7/18/1998 2:27:00 PM
From: Dale J.	Read Replies (2) \| Respond to of 33344

Joe, How were they supposed to initiate it [Sub 1k]? In the following sequence: dismiss it, avoid it, think about it, and finally respond to it. Suppose you have a thriving horse and buggy business. You dominate the market. But you invent a car. Should you not start making the cars, because it will hurt your other business? Joe, that analogy won't work, because it is moving from the low end (buggy business) to the high end (car). CPQ went the other direction , from the high end PC (car) to the low end PC (buggy business). Also a buggy business is easily distinguishable from the car. The low end - high end PC has become more blurred. At least for the average consumer. Lets look at Intel. They first dismissed the sub 1k, then they tried to just avoid it, then they entered in a very limited way with Celeron (celery version), then finally they responded fully with Celeron (Mendocino version). Intel was criticized for not understanding the Sub 1k market, but I think Intel understood it very well and tried to salvage as much profit as possible. Dell is another example. They said they might enter the Sub 1k in a very limited way. Again Dell understands the Sub 1k very well. CPQ invents the SUb 1k (or at least they boasted they did). They had a $hitload of high end inventory that they didn't think would be affected. They thought the Sub 1K would be an additional source of profits. They failed to consider that IBM and HP would respond. It was a momentous blunder. They understood the effects of the Sub 1k less than anyone. But the guys at CPQ once again took the initiative and told the WSJ that many investors don't understand the Sub 1k, and that it is there most profitable PC. That takes a certain amount of audacity <G> Dale