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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (1244)	7/20/1998 11:48:00 PM
From: Bilow	Read Replies (1) \| Respond to of 2578

Hi Lucretius; Some more long term fundamental commentary: Intel is beginning to address the low end PC market. System on a chip is going to rock this industry, and we are going to see prices go really low for standard desktop machines. The latest EE-Times has a good article. Some quotes: Analysts said Intel's Whitney, about which significant technical details are already emerging in Taipei, represents a high-risk but inevitable move to address plummeting PC prices for both consumer and business systems. And they said they believe the products ultimately will have a profound impact on desktop silicon. "Will this restructure the market? In 1999, no; in 2000 and beyond, you bet," said John Latta, principal at graphics-market watcher Fourth Wave, in Alexandria, Va. (My emphasis.) One of the consequences of system on a chip is that companies that provide custom solutions for customers will see their ability to differentiate their product reduced. This is an inevitable consequence of higher integration, unless the company makes its own silicon. I went through one of these integration revolutions back at RENX, and it wasn't pretty. We had designed high speed custom graphics boards, but when integration brought it all on a chip, we had a choice of using other people's chips and becoming commoditized, or starting our own complex chip designs. This is now going to happen to the box makers, and they are already screaming - nobody likes to be forced into a commodity market: "Quite a few of our customers want to customize their systems," said a motherboard maker. "For them, putting the graphics engine into the core logic is a negative feature." techweb.com The above quote, ignores the issue of what happens if the graphics engine being put into the core logic is more than fast enough for the vast majority of purposes. The higher performance that one can give with a particular graphics engine is great. But system on a chip logic is often faster due to the higher bandwidths available on chip. Consequently, it is inevitable that the majority of the graphics card companies are going to disappear. This means that the box makers will lose the ability to distinguish systems based on graphics performance. In other words, the creeping commoditization of the PC continues, but at an accelerated pace. Those who believe that PCs are already a commodity haven't seen anything yet. -- Carl