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

To: Tae Spam Kim who wrote (10288)	1/26/1999 7:09:00 PM
From: Michael Linov	Read Replies (4) \| Respond to of 16960

TDFX C.C. Dave Zacharias, Greg Ballard No discussions of STBI due to quiet period. 202.6M Annual sales, 4.5x last years sales Net income of for year 12.8M (Excluding sega) .78/share. 1.5 Million Banshees Shipped 500K V2's shipping Additional sales of banshee did not come at expense of V2 PC Data Sept-Nov... 9 out of 15 top positions in sales shared among 3 top customers. TDFX had 73% share of PC Performance/Graphic card market. Creative, Diamond, STBI shared in success, showing that 3dfx was the key to sales, not those brand names. If 3dfx had been selling boards, sales would have been $150Million. 3dfx has announced several OEM wins, Including Gateway. Ensoniq was making the boards for Gateway, but there were some difficulties. Goals for 1999: Q1 remains uncertain, and 3dfx suggests we should follow current projections. Demand for V2 will taper off. STBI will become a bigger customer of V2 and Banshee. Q1 will be a challenge, but the transitional issues will be temporary. V3 is ahead of schedule, and is expected to ship in Q1. V3 will span the entire range of the market. V3 will be faster than future products (including many of those announced post 1999). V3-4000 will be available in summer (when chipset is available). Strongest retail launch in history. New corporate identity/packaging. Largest advertising campaign in industry's history. 3dfx will be in complete control. The launch will be worldwide. 1.5M Banshees just under $30 500K V2's just over $30 Creative, Ensoniq, Diamond, 10% share. STBI 4th largest, < 10%. More banshee's sold, so lower margin. Additional costs for higher than expected volume of banshees. 38% GM. AR around 54 days, good shape. Q & A Will GM stay flat, or drop in 1Q? Opportunity to stay flat, depends on pressures near end of product lifetimes. Flat is likely best case. Won't know about V3 shipment volume (this Q) for a few weeks. V3 design wins will be handled through 3dfx/stbi. No design wins outside 3dfx/stbi. Too early to announce, and OEM's will be making decisions in next few weeks. Reception is good, but 3dfx is conservative , and won't be announcing till they win. V3-2000 Mid $20's, V3-3000's Mid $30's, OEM's will be lower. End of life for V2/Banshee. V2 - rest of 99, Banshee till end of Q2. Diamond/Creative will taper off, STBI will take over the slack. V2 continues to sell, and has an attractive price point (which will go down further). Voodoo1 sold all last year. They believe all existing inventory of V2 will be sold by end of year. Banshee won't be a major retail seller in Q3/4. V3 will likely be available retail in (very) early Q2, but they will ship V3 in Q1. Competition is now ATI, NVIDIA. Broader choice of products. V3-2000 vs. old TNT, V3-3000 will compete against TNT-A (.25 shrink of TNT). TDFX believes V3-3000 will outperform it in every respect. Better performing parts/better prices. Retail margin. 3dfx COULD maintain higher margins if it comes to a price war. TDFX hopes to get some of ATI's market share.