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To: Skeeter Bug who wrote (95756)	2/7/1999 3:11:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Skeeter, I think you haven't the vaguest idea of how the economics of technology works. The reason that technology is such a huge force in the current environment is that lowered costs of production have allowed the decrease in pricing which has resulted in explosive demand. When I talk of a disinflationary environment I am talking not only of the cost of DRAM, but the cost of CPUs, the cost of storage, the cost of transistors, the greater size of wafers for chip production, etc. The driving force behind the decrease in prices is not an altruistic (or suicidal) instinct shared by technology companies. It is the result of the recognition that lowered prices results in increased profits. Now contrast that observation with the paper industry, or the steel industry or the aerospace industry. I really think you are clueless about this environment. I think you are trying to drag in the constraints that are true of smokestack industries over to technology, where many of those constraints no longer exist. Just consider this: in the 1983 I believe, an IBM XT equipped with an Intel 8088 KHz processor and a 10Meg hard drive and 48K of RAM cost around $6,500. Today you can buy a 400 MHz pentium II machine with an 11 Gig hard drive and 64Meg of Ram for one third of the price in 1983. That's Moore's Law in action. What you totally fail to grasp is the fact that these hardware advances make more robust applications possible, and it is the emergence of new, power-hungry applications that drive hardware purchases. Now if you want to trot out Fleckensteins's tired arguments you will find that you are talking to an audience that is much too sophisticated to buy off on those vacuous old chestnuts. Let me give you one more very simple example. In the 1970s a new technology emerged: hand-held calulators. Look at how TXN purposely dealt with the technology. Instead of trying to maintain high prices they purposely low-balled prices to stimulate demand. I suppose price could have stayed in the $400 range (which was you needed to pay for one of those machines ca 1970), but how many people would have bought? Today such a calculator is a commodity item, and you can get one that is much more funtional than the 1970 version for under $10. TTFN, CTC