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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: thomas hayden who wrote (14501)	8/23/1998 12:36:00 AM
From: S. maltophilia	Read Replies (2) \| Respond to of 25814

<< Two things that I think are important for the future of LSI, is one the growth of DVD. If you think DVD will catch on in a big way this is probably a good one to own.>> From this week's Barron's: interactive.wsj.com@5.cgi?id=SB903739367300426000.djm&template=pj1-combo-nf.tmpl DVD Stalls The window of opportunity won't last forever, either When the digital video disc first hit the shelves ("Magic Disc" April 28, 1997), we forecast it would soon sweep videodiscs, compact discs and even videotape recorders into the dustbin of consumer-electronics history. A year and a half later, the potential for DVDs remains largely unfilled -- and now time might be running out. The DVD launch is ahead of where VCRs and CDs were at this stage in their life cycle, but it's going a lot slower than predicted. DVDs are increasingly replacing computer CD drives. But the same isn't true for personal entertainment, despite hundreds of available DVD movie titles. "We are nowhere near a mass market yet for DVD, and we really should be if you listened to its supporters," says Larry Haverty, a senior vice president at State Street Research in Boston. So, what went wrong? Depends on whom you talk to. Certainly the initial cost of a player -- $500-1,000 -- didn't help. Neither did the initial dearth of movies. But now a basic player costs as little as $300, and there are nearly 2,000 movies on DVD priced between $20 and $30. In fact, most of the big studios are now on the DVD bandwagon, including onetime holdouts like Paramount and 20th Century-Fox. Though the impact is hard to assess, Circuit City's move to launch a rival digital-video format, called Divx, has clearly confused would-be buyers and persuaded many to hold off for now. While Divx players are more expensive, the discs are much less so -- since they typically self-destruct after 48 hours. The basic question is whether digital video is for people who want to own a movie forever or see it just once or twice. That will be decided this fall when Divx goes national, and the initial reception is not bullish. "I am convinced," writes one reviewer in the latest issue of Stereo Review, "that Divx will be the biggest and most costly flop in the history of consumer electronics." But the biggest challenges facing DVD will be from rival technologies that are still not fully in place, including digital videotape and video on demand delivered over cable and satellite systems. "The window of opportunity to create a mass market for DVD will be closed as video on demand becomes available," says Warren Lieberfarb, president of the Warner Home Video unit of Time Warner and one of DVD's loudest cheerleaders. There are signs that DVD is beginning to catch on. DVD player sales hit new records in the traditionally slack summer months of June and July, rising to an annual rate equal to one million units. Divx promotion this fall will inevitably spur further interest. "Up to now stores selling DVDs have found it hard to justify large promotions, but Divx will change that," says Bob Gerson, editor-in-chief of This Week In Consumer Electronics, or TWICE. "The DVD player makers will finance promotions to stand up to Divx. That's going to draw people into stores and boost sales." It had better. "DVDs have been around for some time now and people will soon get bored," says Gerson. "When it comes to new consumer electronics devices, you only get so many bites at the apple." -Jay Palmer To what extent does LSI need the movie market?

To: thomas hayden who wrote (14501)	8/24/1998 8:37:00 AM
From: Gary	Read Replies (1) \| Respond to of 25814

To all, does anyone know WHEN Sony will announce a new contract with LSI (or an extension) to make the Playstation chips? Thanks, and I agree this is a very important psychological factor for LSI investors and the market. GC

To: thomas hayden who wrote (14501)	8/24/1998 2:50:00 PM
From: Jock Hutchinson	Respond to of 25814

Someone please correct me if I'm wrong but Symbios farms out most of their manufacturing. I would think that a large part of Symbios' manufacturing in the future will take place at the Gresham plant. Tom: Close. Symbios was about to farm out some future high end work, when it was taken over by LSI. However, those contracts were cancelled when LSI took over Symbios, since this next generation work will be done at Gresham. The emphasis is on next generation, so this will not add to the bottom line in the near future. I also want to give another perspective to the remarks about Wilf taunting the shorts at Roby Stephens. LSI has been subjected to numerous rumors concerning its Sony business. These rumors have to date proven to be untrue. While it might be argued that LSI looks foolish attacking the shorts, when in less than a month LSI needs to preannounce, it might also be argued that Corrigan finally took the time to attack the rumor mongers who have been unfairly maligning LSI.