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

To: Marketeer who wrote (10918)	3/1/1999 12:15:00 AM
From: Michael G. Potter	Read Replies (2) \| Respond to of 16960

Thanks for the post. That's why I never want to "take care of" anyone until I see the basis for his opinion. I agree that OEMs are important to 3dfx. They won Gateway with Banshee (did you notice that they're using it for their P3's as well? and they're finally advertising that they're using Banshees?) and they did win a few other decent size OEM's. They probably couldn't handle both the OEM demand and the retail demand for Banshee so one big OEM is a blessing in many ways. I think that 32 bit 3D is a moot point for the next refresh. It isn't advertised as a feature and I don't think that it is a deal breaker. V3 will significantly outperform the other cards in benchmarks and it takes too much ad copy to list all the features. Heck, OEM's can stretch the truth and say 32 bit because V3 has 32 bit internal rendering. True AGP support is nothing. It doesn't give the OEMs anything and the V3 part allows them to say AGPx2 so that would be transparent in their ads. V3 will be more than able to handle DVD chores via software. Even the new ATI part only takes part of the task away and still uses software decoding. V3 does accelerate some DVD functions and OEMs can again claim it in advertisments. As for pricing, there is a floor. The other graphics companies have to make a profit as well. S3 and nVidia have to sell through cardmakers who sell through to OEM's. These cardmakers also compete in the retail market. In the end, the price is the only way to do it. They need relief on the chip price (which hurts nVidia's margins and ability to fund R&D). It is more inefficient and adds cost. The V3 2000 looks like it will have a street price of around $100. COuld be cheaper for high volume OEM wins. ATI has the same model as 3dfx and also has a decent chip. STB relationships are important here. I see nVidia losing some OEM's to 3dfx, ATi, and S3. That makes retail even more important. Voodoo and 3dfx are strong brand names. They offer compatability. Even today, there are games coming out that are Glide only, or Glide first, or Glide best. Look at the retail success of Banshee, even though TNT has it beat in many specs. Look at all the embedded Rage Pro's and Riva 128's. Seems like a 3D only add-on (V2) will still do ok for a little while longer. Plus 3dfx has good AMD 3D now support. The V3 2000 should be cheap enough to get embedded on those MB's. I guess I'm much more optimistic about 3dfx's chances than you are. I don't see V3 dominating all the OEM's, but I do think there will be wins. The real wild card is their next chip. If "Rampage" is another leap forward, then Glide will become a real advantage again and they'll strenthen their brand name. Michael

To: Marketeer who wrote (10918)	3/1/1999 4:46:00 AM
From: Chip Anderson	Read Replies (2) \| Respond to of 16960

It's interesting to see how different people can look at similar data and come out with wildly different conclusions. 32-bit rendering is in the "nice to have but OEMs won't pay extra for it" category. DVD decoding is a problem area that needs to be addressed. "Full AGP support" is a BS marketing term. Until Intel launches its AGP4x motherboards (which just got delayed again BTW), Voodoo3 has as much "AGP support" as everyone else out there. And Tony Tomasi told me personally at Comdex that 3Dfx would have an AGP 4x board out in time for the Intel launch. As for the bottom half of your post, you are making the same mistake that everyone who evaluates a leading high-tech company makes - namely assuming perfect execution by the competition (S3, etc) and no response from the leader (3Dfx) in the event a credible threat does emerge. History doesn't support those assumptions. Here's the longer-term picture: nVidia, ATi, S3 and the others have just finished a grueling marathon to catch up with the industry leading Voodoo2. In some areas then even managed to pass the V2 (color depth) not in others (SLI mode). But, unfortunately for them, 3Dfx wasn't waiting around at the finish line of that marathon. Instead, 3Dfx started running a totally new marathon - namely creating the real next generation chip. The current bet on the table is: Who will win the race to the next generation? I'm betting on the company that's been working full-tilt on the problem for the past year now. Not the ones that are only now beginning to think about the issues. Chip coolhistory.com