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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: Michael Linov who wrote (8548)	10/22/1998 3:28:00 PM
From: Sun Tzu	Respond to of 16960

Let's talk about ATI's report. More accurately let's talk about their self portrayal in their quarterly report: TORONTO, ONTARIO--ATI Technologies Inc. (TSE-ATY), the world leader in 3D graphics/video acceleration and multimedia solutions, today announced..." And later the lead highlight of the operations is stated as: During the quarter, ATI announced its next-generation 3D, 2D and DVD accelerator chips and boards to critical acclaim by journalists and analysts from around the world. Using an advanced 128-bit 3D architecture, the RAGE 128 GL chip supports 32MB of memory and delivers workstation quality and complex 3D features for high end systems. The RAGE 128 VR chip is a mainstream solution specifically designed for mid-range PCs and is available in a space-saving and cost-saving small footprint 256-pin BGA package. In add-in boards, ATI's line-up includes the RAGE MAGNUM for the OEM, SI and VAR markets, which offers workstation class performance with a 32MB frame buffer; the 32MB RAGE FURY optimized for maximum 3D gaming performance and corporate applications; and the XPERT 128 graphics board, offering top performance for all 3D and DVD applications in the mainstream market. ATI also announced during the quarter, that the company was selected by General Instrument Corporation to provide graphics chips for General Instrument's next-generation advanced interactive digital cable set-top terminal, the DCT 5000+. This is ATI's initial entry into the consumer electronics industry. GI is expected to supply major cable operators across North America with at least 15 million of GI's digital set-top terminals over the next 3 to 5 years. The DCT 5000+ is scheduled to begin commercial deployments throughout North America in 1999. Now besides providing a great contrast in salesmanship versus the amaturish anouncements from 3Dfx, there are several points to note. To begin with, ATI clearly believes that 3D is the future of the the industry and is trying to paint itself not as the greatest graphics company, but as the "leader in 3D". Now we all know that the leader in 3D is 3Dfx (but unfortunately cat has gotten their tongue and they don't know how to blow their horn). This means that 3Dfx is in the sweet spot of the market and should grow substantially going forward. Another point to note is that ATI's product strategy is remarkably similar to 3Dfx's. This is both good and bad. On the good side it means that 3Dfx has chosen its product path well and has about a 9 month lead against ATI. On the bad side it means that they have to go against ATI's sales and marketing experties and ATI is years ahead of 3Dfx here. I think the market is big enough that they will both prosper, but 3Dfx cannot afford any more mistakes. I've often compared 3Dfx to the early ATI. Now it seems we may soon have to compare them to the modern ATI as well. Sun Tzu