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To: Skeeter Bug who wrote (105673)	2/27/1999 11:06:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 176387

Skeeter, don't you understand that what we need is data, not intuition or equations. Your equation isn't at fault, it's the input. You assumed that unit growth was based 12% - 15% on marketing data. You next assumed that ASPs fell significantly. And from those assumptions you calculated what you prefer to believe the revenue growth was because Michael Burke said so. Now let's look at alternate assumptions each consistent with existing reports and data. If unit growth was 15%, and revenues increased by 3% then ASPs declined by 10.5%. What's wrong with that scenario? What is wrong is that we still need data, not assumptions or calculations based on assumptions. Every marketing statistic has a confidence interval associated with it. What is the standard error of your calculation? Why would you have more faith in it than mine? After all, both are consistent with what we have been told. The fact is that the only indication I have of computer revenues comes from a report from Merrill Lynch which neither of us have seen. That report shows that revenues either increased 1% (as in the article you cited) or 3%-5% (as in the two articles I saw). But those are at best tertiary accounts. What data did Merrill use, and what was their source, and what was the integrity of the numbers -- those are the real questions, and all of the suppositions in the world will not erase those questions. Your reliance on Michael Burke leads me to believe that you have confidence in his world view. I think he has a monumental ego that chooses to seize on any bit of information supporting his point of view and ignoring anything that is inconsistent, or, as he clearly did with me, try to twist the data to his own purposes. I suggest you try some independent thinking. He has yet to be right on anything concerning the computer industry where data are available. TTFN, CTC

To: Skeeter Bug who wrote (105673)	2/28/1999 8:52:00 AM
From: jttmab	Read Replies (1) \| Respond to of 176387

Skeeter, is the computer that you bought last year for $1k worth $900 right now or $700? I don't think that is exactly the correct question. It's not what the computer is worth from year to year but the price of a system bought this year vs. last year. The system you bought last year for $1k is not likely to be the same system that you would buy this year. Besides configuration characteristics like CPU there are other items such as DVD. Last year one may have purchased a PC with a 32X CD today you might purchase a 5X DVD. I think that buyers have a certain price point and tend to buy as much as they can for that amount. For example, I tend to buy a system on the order of $2000; if the basic sysem is less than that, I'll "upgrade", e.g., larger monitor Jazz drive, etc. till I hit the my price point. The sub $1,000 units appeal largely to a newer market segment and overall lowers the ASP. An interesting question is what is the average life of a system and is that expected to lengthen as computing power increases. I won't go so far as to say there is a conspiracy, but there is motivation on the part of INTC and MSFT, et al, to ensure that the average life doesn't decrease...sic Windows 2000, Pentium IIIs, natural language speech processing, increased bandwidth, CPU/3D graphices intensive games, etc. ad nauseum. Best Regards, Jim