Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (37511)	11/26/1998 2:51:00 PM
From: Earlie	Read Replies (1) \| Respond to of 132070

Skeeter: I loved your comments. Wouldn't argue with you about the low end market being "marginal", especially with respect to the margins that it creates for its participants. (g) But the bottom end sure is growing in size. The IDCs of this world see it as half or more of the total market already. Not bad, given the short time frames involved and the fast growth from zero. Today, it is where the sales action is occurring, hence companies without product offerings there are really getting hurt. (Dell knows it's a bog, but he has no choice). I agree with your comments that AMD took new Dell business and not old business. That's right on the money. Your next comment (with respect to cannibalizing) delightfully puts it into perspective, as that is exactly what appears to be going on. Flat year-over-year unit growth and a fast-growing lower end sector spell it out nicely. A further consideration is that aside from losing market share, Intel has also lost its ability to force its clients "up-market", that is it can no longer "encourage" clients to purchase higher performance (more expensive, better margins) micros through the simple expediency of reducing production of lower priced chips. (They couldn't buy what wasn't produced when Intel was a monopoly). Now, the situation has reversed. Intel's competitors are dragging Intel down into the low-margin, bottom end swamp. (Ditto for Dell) What is amazing to me is that with all this negative evidence in full view, with its earnings well reduced and promising to sink further, with its competitors starting to draw blood, with the growth in its end market at an end, and with the insiders shovelling stock out as if there will be no tomorrow, the market pays MORE for its paper. "Mania" says it all, I suppose. Best, Earlie