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

To: Vegas who wrote (9696)	12/15/1998 3:05:00 PM
From: Obewon	Respond to of 16960

<<Why would they do that? If there is demand for the product why not sell it, or lose the demand to other OEMs. Its like cutting off your nose to spite your face, IMO Until they are able to adjust to different product lines I see no other alternative. >> Because every Voodoo-based product they sell strengthens 3Dfx's brand when they know that they (Creative/Diamond) aren't going to benefit from future products. Instead it gives 3Dfx a better position to compete with them come 2Q99. Profit is good to a point. Unfortunately for them, it is survival that has suddenly moved to the forefront with this deal. A profitable company whose major product disappears is not going to survive. Right now Nvidia is the only remaining competitive graphic chipset provider. The question is: does it make sense for two giant boardmakers like Diamond and Creative to share Nvidia or gobble them up. In the first case, all three make modest profits. In the second case, one of the two giants is in for a BIG fall while Nvidia and the other make off very well. OB