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

To: Stuart C Hall who wrote (10675)	2/14/1999 12:55:00 AM
From: Patrick Grinsell	Respond to of 16960

Stuart, Slap a TNT chip on the next Diamond Monster and it will still sell. I'd argue that most retail consumers know the card, maybe know the card's characteristics (3D) and know the chip last. Those retail consumers are not plugged into to our TDFX soap opera. Should Creative and Diamond keep selling boards with names formerly associated with the TDFX brand they will still sell. I think TDFX failed in their attempt to brand Voodoo successfully. Do you have any data to back this up? The only data I have is that Diamond has gone from 40% of 3dfx revenues to 10% in 4Q98. The same goes with Creative Labs. A branding effort by Diamond, as you suggest, would appear as a more "lumpy" distribution. Clearly consumers are going to more and more to alternative sources for the 3dfx experience. Diamond sales: 2Q98: about 24M 4Q98: about 6M Yet overall sales have increased to an all-time high of 60M in 4Q. The consumers appear to voting with their dollars here. Conversely, that shows TDFX's major weakness. Let's say Rampage kicks ass with feature X. Sells like mad for 3 months but then nVidia comes out with TNT3 that has features X and Y. I believe our saving grace here is that 3dfx has been working on additional features that have taken over 2 years, not 3 months to implement. Adding geometry acceleration and other high-end features aren't as simple as going from 16bit to 32bit. If 3dfx-files shows only incremental increases in technology I will dump faster than an overdose of exlax. Pat