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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Les Paul who wrote (39077)	2/28/1999 4:04:00 PM
From: JEFF K	Read Replies (1) \| Respond to of 50808

A chip sevaral times faster that the Pentium III Monday, March 1, 1999 Sony To Release PlayStation 2 Featuring 'Movie-Quality' Images TOKYO (Nikkei)--Sony Computer Entertainment Inc. plans to release the follow-up to its popular PlayStation video game system by March 2000. The successor to the world's biggest-selling 32-bit game console is to feature a microprocessor co-developed with Toshiba Corp. (6502) that provides motion picture-quality images, The Nihon Keizai Shimbun learned Sunday. Likely to be called PlayStation 2, it will also be able to play movies and music stored on DVDs, allowing players to integrate various entertainment media into video games. While it will have data-processing capability several times more than that of a personal computer, the price will be kept below 100,000 yen, company officials said. Development costs for the new 128-bit microprocessor -- which integrates image processing, memory and other functions onto a single chip -- reached nearly 10 billion yen. The chip is to have data-processing speed several times faster than that of Intel Corp.'s Pentium III. The Sony unit seeks more than dominant market share in the video game console market with the chip, company officials said. "We take aim at the stranglehold on the chip/operating system market enjoyed by the Intel-Microsoft alliance," an executive said. He added that major battles will shift from spreadsheets, e-mail or other business-related areas to home entertainment systems fusing games, movies and music. The new microprocessor will allow users to handle nearly 50 times more 3-D image data compared with Sega Enterprises Ltd.'s (7964) Dreamcast game console. It will also let users produce game characters comparable in image quality to Walt Disney's Toy Story. While the PlayStation console employs CD-ROMs as its medium of data storage, its successor will adopt DVD-ROMs, boosting storage capacity by 7-8 times to 4.7 gigabytes. (The Nihon Keizai Shimbun Monday morning edition)

To: Les Paul who wrote (39077)	3/1/1999 7:06:00 PM
From: John Rieman	Read Replies (1) \| Respond to of 50808

Les................................................ 1) Is Cube's technology going to be outdated before we ever see any substantial financial growth from the company? Depends on the market. VCD is slowing. During the 4th Q, VCD revenue was about $10M short of Q4, 1997. This continued contraction in VCD revenue has plagued CUBE's revenue growth, since peaking in 1996. Encoder chip revenues have shrunk to around 5% of sales. This was due to the single chip, DVx. What used to cost $1,500, now costs $50 to $300. This area will grow, but not much in 1999. These 2 markets now account for 35-36% of revenue. In the beginning of 1996, they accounted for 95% of revenue. Divicom grew 40% last year. Now at 40% of revenue. Settops grew about 40% last year. C-Cube accounted for about 2M boxes. The world market was 10M for digital settop boxes. Cube should see a larger market share here, for the next 2 years. DVD was $7M in sales in 1997. $24M in 1998. C-Cube is growing, but it is also replacing the markets that fueled growth in 1996. 2) Why, when Cube met expectations last quarter, has the price of the stock lost around 40%? The market trades on perception. Management's guidance was for no growth for 6 months. The market decided not to wait. Do you honestly believe that the price of this stock will ever rise consistently without being shot back down to the ground? Yes, the stock will rise, its current value is between $24 and $35. But, as with all tech stocks, it will be cut in half, from time to time.