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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (29494)	4/11/1999 5:09:00 PM
From: Clarksterh	Read Replies (2) \| Respond to of 70976

Skeeter - As usual, it's interesting to debate with you: au contrare, when the rapid drop occurs from a point where the dram mfrs are making a dime a q, it is a BIG deal! My point was that as DRAM's enter the mainstream they drop more than usually fast. 64Mb are just now entering mainstream so such a drop is 'normal' even if not desirable. For instance, right now 1Gb DRAMs probably cost two or three times as much per Mb as does 64Mb DRAM, but by the time 1Gb takes over for 64Mb they will probably cost the same per Mb. Thus they dropped faster, but it is expected, and isn't a huge deal. As long as it doesn't continue to drop once it becomes the largest source of revenues for DRAM makers. dell says qly sequential rev growth will slow to mid single digits. notice the word s-l-o-w (that is a bad trend). dell said that they will have to give up margins for market share... I think we'll have to agree to disagree on this one since I have a quote from Dell's latest press release: "Executives at Dell, the leading direct distributor of PCs, said the computer industry should continue to grow at historic levels of around 14 to 15 percent this year while Dell will grow at a multiple of the market." EVERYONE is now headed for the <$600 market now. what will e-machines do? <$400? microworkz already has a $299 pc on the drawing board to be released in a few months... already 500k on order. do you think it has 64 mb of dram? If this is true, and it captures a sizable portion of the market then I agree this is not good for the near term health of the semi equi makers. But I'd love to see a histogram of units sold vs price. i'll defer somewhat to your expertise in this area, however, there is handset pricing pressure that i am aware of first hand. drops of over 20%. Just FYI, Qualcomm's handset margins are growing Q by Q, and Nokia's handset margins are growing at a phenominal clip (operating margin was 14% last year, 19% this year). Lucent is, by comparison, stodgy, but still doing pretty well, and Ericsson is just dying. This margin growth by so many companies is unlikely in a hurting market. BTW, when you refer to handset pricing pressure are you referring to retail - if so you should be aware that this is not due to lack of demand but due to the subsidies given by the service providers in an attempt to grab market share. Thanks for the debate. Clark PS Just FYI, on a broad scale you and I agree that PC's and DRAM are soon going to no longer be the growth engine of the semi industry. Exactly when this will happen and how long it will take is the question. But we differ on the death of the semi industry.<g> I think that now it is a race for communications and that the PC industry will pass the batton to comm.