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

To: Jeff Lins who wrote (9710)	12/16/1998 1:58:00 AM
From: Jeff Lins	Read Replies (4) \| Respond to of 16960

Alright, Pat, I gotya! Your post is number 6017. Here is my post, number 5942, which kicked of the STBI idea, and I am quite sure, put the spark into Ballards head <ggg>: Message 5380034 (from my discussion with Dave Zacharias) >>>>>>>>"OK, I mentioned earlier the prospect of them selling their own boards (I will refer to this as Jeff's rumor #147). During the discussion, he said that though they had talked about it and that it wasn't happening any time soon, if at all, he cited distribution as being a major factor. I then mentioned that STBI was profitable...and could produce boards...and had a pretty small market cap...and that they have great OEM and retail distribution...(this would constitute Jeff's rumor #175) he laughed, and said that they have noticed such things..." Note that I TRIED to get people into the "make their own board" idea with this post (5825), which NOBODY responded to: Message 5329284 >>>>>>>>>>>>>Now a topic for discussion: Does anyone know if Matrox or ATI ever shipped chips to third party board makers? The reason I ask is that now that TDFX has great name recognition and is in great demand I wonder if they are considering producing their own boards and leaving out the third party board makers. On the positive side of the case, TDFX would make LOTS of money. If they sell a chip for $45 and it costs $23, then the whole board with memory couldn't cost $50. Distribution wouldn't be that difficult, since they would work direct with the top dozen accounts and go through wholesalers/distributors for the rest. The product is stocked not because it is a Diamond Monster, but because it is a Voodoo Board, and that is what people want. Without competition, they could control the pricing. And since they are looking to get OEM deals with a great product, why not do it themselves? They would cut out the middle-man, offering a more cost effective product. And since ASP would go from $45 to, say, $150 for a V2, Revenues would go through the roof. On the negative side, if it didn't work out, there would be many bridges burnt. Part of the beauty of the current business model is that the third parties pay for a lot of advertising, which TDFX would either absorb or lose out on. And since there is a new board out every other week, the reviews in mags keep the product in consumers minds. Also, the other boardmakers may jump on someone elses ship. And since third parties generally have better OEM ties, failure to penetrate that market could be trouble. No one can doubt the success Matrox and ATI have had using this model. Could it work for TDFX???? I am very interested to hear comments! And with no response, I post the following in message 5832: Message 5331945 >>>>>>>>>Now how come nobody wants to discuss the direct sales thing? Hey Chip, get the ball rolling.