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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Mephisto who wrote (12187)	11/30/1998 8:29:00 PM
From: Steven	Read Replies (1) \| Respond to of 64865

So Sun should buy SGI!

To: Mephisto who wrote (12187)	11/30/1998 9:27:00 PM
From: Bala Vasireddi	Read Replies (1) \| Respond to of 64865

For "Toy Story" Sun workstations were used for the "rendering" part and SGI was used to do the final editing (or something like that I'm not a graphics head so I don't know what the technical term is). Apparently this was the case because editing tools were only available on SGIs. I agree that Sun could improve their graphics capabilities. But... that's NOT where their focus is. Sun's approach to any market is: "volume" at least in UNIX market. They want to amortize the cost of their "chip" development and their substantial investment in "OS" across as many platforms and markets as possible. So they come up with a "generic" solutions that addresses 80% of the market needs, at a significantly better price/performance that specialized solutions like SGI/HP (in graphics space). Sun's current workstation lineup fits the bill perfectly in that regard. They have low-cost and decent mid-range to high-end graphics. They just recently added ATI as another low-end graphics supplier for "Darwin" line. They are significantly cheaper than SGI or HP boxes (in terms of price/performance) and do the job for "most" of the tasks. SGI still has good technology. But they are not making money. Stock price drops. People leave. Simple. SGI is losing "volume" fast; real fast. Sun's workstations are eating into its bread-butter market. And the low-cost NT workstations are also encroaching into the low-end workstation market. As volume drops, chip prices and funding your own OS development starts to sky-rocket. And given that SGI doesn't have other markets which can pick up the "slack" makes it that much harder. Same thing goes for HP's UNIX workstation business. That's why they dropped PA-RISC in favor of Merced, but when it slipped, they brought PA-RISC back. But they lost a lot of momentum. SGI and HP are now left fighting for the higher end (i.e fewer units) of the market with specialized solutions (atleast in the UNIX space). NT space is a different ball-game. Everything (CPU, OS, praphics) is commoditized. Competetion is purely on price and is very cut-throat. I don't see SGI surviving very long unless other areas magically pick up. HWP's stock price will be depressed (atleast will not grow as fast) because the PC/Nt segment will pull their margins down, until NT starts scaling in the high-end (which is atleast 2-3 years away). So I particularly don't like them as a stock investment even though I respect HP as a product company. -Bala