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

To: Marc who wrote (11663)	4/10/1999 8:13:00 PM
From: Patrick Grinsell	Respond to of 16960

The Dell Deal?: The Dell rumor may or may not be true, but I'd like to look a little at the psychology of the thing. It looks like the current STB TNT contracts are going to China. It's also no secret that STB planned on lowering prices for their remaining boards to their vendors to get them out of inventory as soon as possible. If we put ourselves in Dell's shoes it starts to make a little more sense. Dell knows that STB is now a temporary solution for their video needs. They could switch over to Voodoo3, but Voodoo3 is just ramping up and would require additional testing and documentation changes before a switch can be made. So Dell goes with Diamond to ensure, at least for the short term, that the need is filled. But why is Dell still buying STB TNT's for China? That's easy. China is extremely price competitive and chances are that Dell is matching the cheaper parts for the cheaper systems. I would hazard a guess that once the STB TNT cards run out that they will be replaced with cheaper ATI cards. I think it's obvious that Dell and STB have a tight relationship. I'm an not surprised at all to find out that they are interested in 3dfx's future products. This time around, the timing was just really poor. Pat