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.

Technology Stocks : Silicon Graphics, Inc. (SGI) -- Ignore unavailable to you. Want to Upgrade?

To: ramin shahidi who wrote (5515)	1/10/1999 6:10:00 PM
From: dav	Respond to of 14451

Home - Yahoo! - Help -------------------------------------------------------------------------------- Index \| Top Stories \| Business \| Tech \| Politics \| World \| Local \| Entertainment \| Sports \| Science \| Health Yahoo! News Business Headlines Sunday January 10 12:36 PM ET Silicon Graphics To Unveil Low-Priced Computers By Andrea Orr PALO ALTO, Calif. (Reuters) - Silicon Graphics Inc. (NYSE:SGI - news), often known as a BMW of the computer industry for its high-quality, high-priced workstations, Monday will introduce dramatically cheaper machines in an effort to reclaim business from its bargain-minded competitors. For the company, the new products will be the first visible fruit of a year-long effort to turn around its ailing business and shake its image as a computer maker for the exclusive few. For its customers, Silicon Graphics promises to deliver state-of-the-art graphics and design capabilities in ordinary desktop computers -- machines costing between $3,000 and $6,000 it says will perform many of the same functions previously reserved for its $25,000 models. ''We're going to spawn a whole new set of customers who will say, 'Wow, I didn't know I could do that','' explained Murali Dharan, vice president of marketing at Silicon Graphics' workstation division. Along with offering lower prices, the company hopes to attract more customers by conforming for the first time to the industry standard. The new workstations will run on Intel Corp. (Nasdaq:INTC - news) chips and the Microsoft Corp. (Nasdaq:MSFT - news) Windows NT operating system. ''SGI's installed base of customers is foaming at the mouth for these things,'' said Jay Moore, an analyst for Aberdeen Group. ''It is a real coming out party for Silicon Graphics. They've really faded into the background over the last few years.'' Years ago, the Silicon Graphics' name was synonymous with special effects and computer-generated visualization. Its workstations are still used by engineers, scientists and artists for all sorts of simulation such as automobile design and crash tests, urban planning, animation and other special-effects. Silicon Graphics' technology was used in such films as Jurassic Park, Forrest Gump, A Bug's Life, Antz, and Prince of Egypt. But over the years, more computer makers like IBM and Hewlett-Packard Co. (NYSE:HWP - news) figured out ways to deliver many of the same functions in far more affordable boxes. ''Early this decade, Silicon Graphics machines did all the special effects work in movies, and you saw special effects mainly in high-budget movies,'' says IDC analyst Tom Copeland. ''Now there are special effects in everything, even a lot of television shows.'' As a result, Silicon Graphics fell into a position similar to that of Apple Computer before the iMac revival: it rigidly adhered to the highest quality standards but lost touch with much of its market. (Like Apple's iMac, Silicon Graphics' new workstations are blue.) ''I don't think they've ever had a beige box,'' says Copeland. ''Silicon Graphics has always appealed to the visual person rather than the corporate desktop type.'' The challenge now will be to expand that following by convincing more corporate customers its machines are not just comparable but superior to competitive models. ''They've done an amazing job taking the Intel architecture and tweaking it a bit to provide extra value and innovative features,'' says Aberdeen's Moore. ''It remains to be seen how well they market it. Sometimes tweaking scares off customers.'' Analysts also caution that even the best reception of the new workstations will not complete Silicon Graphics' turnaround. The company, which has been through lay-offs and major management shifts in the past year, still needs to beef up its high-end server business, and demonstrate it can respond to market trends more swiftly than it has done in the past. ''I see this as a first step. There are several problems that have gotten Silicon Graphics where they are today and no one system is going to solve that,'' said Copeland. -------------------------------------------------------------------------------- Sat Jan 09 \| Fri Jan 08 \| Thu Jan 07 \| Wed Jan 06 \| Tue Jan 05 \| Mon Jan 04 \| Sun Jan 03 Index \| Top Stories \| Business \| Tech \| Politics \| World \| Local \| Entertainment \| Sports \| Science \| Health -------------------------------------------------------------------------------- Questions or Comments Copyright © 1999 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

To: ramin shahidi who wrote (5515)	1/10/1999 6:54:00 PM
From: Eli Lauris	Read Replies (1) \| Respond to of 14451

Ramin, I believe the 2.5 Million NT unit number came from Business Week article "It's battlestations in Workstations", Aug 11, 1997. Unfortunately, I don't have a on-line account for BW to confirm it. The other source is IDC report (http://www.idc.com/HNR/pwstmob.htm). For 1996, it lists 831,000 personal workstations (meaning NT workstations) with 38% growth. If you assume the same growth in '97 and '98 and project it for '99, you get 2.2 million NT units projected for 1999. Sorry I can't find any more accurate info on line at this time, but I'm pretty sure my memory on the 2.5 million number is correct. How can SGI gain 30% of that ? By outperforming (on price and price/performance) and outmarketing other competitors. One of the consequences of the openness and standardization of NT market is that customer loyalty to a particular vendor is not very deep. If customer wants an NT machine and the SGI VW performance better and/or the machine cheaper than HP or an Intergraph, why wouldn't the customer buy SGI ? It'll run all the same NT applications, but run them faster. I also think SGI still has a pretty strong brand association with graphics, that HP, Intergraph, Dell and Compaq don't. So I think many customers who've abandoned SGI in the past because of high prices and/or inadequate ISV support would be tempted to buy SGI again. I'm not saying all this is slam dunk. SGI marketing will have to do much, much better than it's done in the past to win in this market, but I believe with Beluzzo's prior experience with high volume products (ink-jet printers and PCs) there is a strong possibility for that.