Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Diamond Multimedia -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (4190)	3/16/1999 10:08:00 AM
From: Matt Kaarlela	Read Replies (1) \| Respond to of 4679

You say the RIO is an example of a commodity with razor thin margin? I don't understand your logic on that one. How could a product that is currently only manufactured by one source be commodity? Perhaps you mean it will be a commodity when other manufacturers join in. To that I would understand your view but disagree based on the advantage of time for DIMD to release improved RIO models along with profit benefits from volume manufacturing. Eventually those benefits could be overshadowed by a giant like Sony or Intel but it would take time. On another note, your comments about palmtop computers replacing RIO is interesting. I never thought of using them to play MP3 audio. I guess cost would be the biggest barrier. I always felt RIO was still too expensive for average teenagers to buy. As volume goes up and cost goes down, I expect DIMD to release a future version of RIO for around $129 (priced like Nintindo 64) which would really open up the teenager market. A palmtop that would also act as a RIO would probably be a hit with the upper middle class college crowd but I still think the majority of teenagers would get a lightweight laptop rather than a palmtop for schoolwork and use a RIO for music. All jmho.

To: Ausdauer who wrote (4190)	3/16/1999 2:07:00 PM
From: Terrence Von Holidae	Read Replies (1) \| Respond to of 4679

The life-span of these products, as you well understand, is shortened by the attraction to very high initial gross margins as it summons countless imitators into the market. Thus, high-margins are quickly replaced by lower margins, as all make a drive for market share. The quick product life-cycles are a constant source of concern to any investor, professional or otherwise, as the stock price must discount an uncertain revenue stream as the product ages. So, many of these companies ride quite dramatic roller-coaster rides as the mature into something more predictable, or not. I followed the industry closely between 1980-1990, but am less enamored by it as time proceeds. A related story may shed some light on how I understand markets: Many afforded Radio Corporation of America, and other broadcasters, in the 20's extraordinary multiples; and again, Sylvania, Admiral, and other T.V. box makers, high multiples in the late fifties and sixties; and, once again, mainframe makers, in the late sixties, and now, p.c. makers, and internet makers. All of these advances produced enormous advantage over existing technology, but all appear quite commonplace and mundane shortly after. The barrier to entry in these businesses is remote, as the new advance is so widely embraced by everybody; indeed, all quickly comprehend the advantage to their personal life or business, that it quickly becomes the standard way of life very soon. Well, enough nonsense. I wish you the best of luck in your investments. T.V.H.