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Technology Stocks : RealNetworks (NASDAQ:RNWK) -- Ignore unavailable to you. Want to Upgrade?

To: LWolf who wrote (2798)	4/20/1999 3:36:00 PM
From: Bernhard Michaelis	Respond to of 5843

from the Apple board: Reply # of 24222 I wonder how much of their downward movement can be attributed to QT4 I agree with this. The market has not yet valued Real Networks as anything but the runaway leader in internet media technology. Very, very little. Apple didn't announce any QT streaming server contracts. Meanwhile, RealNetwork has established such strong business relationships that even MSFT has been unable to slow the adoption of Realplayer as the defacto streaming standard of the internet. That highlights the difference in the business models. For RNWK, its all about those big contacts. Apple wants streaming media to not be a product, but a standard server feature. It's like a mail or web server. Standard part of a server software package. That is a big threat to RNWK. Adam suggested QT as a sort of loss leader to sell G3 servers but G3 servers don't have the capability to replace Sun or multiprocessor Xeon servers used at the big sites. It would make a good candidate for smaller sites but those sites managers would have to decide if a somewhat better technology would be worth abandoning the player that 85% of the customers have. I'm afraid this could be a Windows/Mac story all over again - a somewhat superior product without the business relationships/marketing to ever break into the mainstream. That's not what I meant. Apple Hardware sales are about authoring and viewing multimedia, not serving it, although longterm they could move in that direction. QT is not a loss leader, nor is Java. 85% of the server customers have RNWK, but what if that is just 85% of the current market, and the current market is only 1% of the potential market? Quicktime is going to come bottom up on RNWK. The beauty of Quicktime is that it can stream from anywhere, CD, DVD, Internet, etc. With a wide variety of codecs and capabilities. The typical business response to that approach is to take the high ground, ie, Cisco and networking equipment. However, with RNWK, their technology is so much more constrained than QT, that won't be viable. Now, a lot of how this unfolds will depend on Apple business management. If I were Apple, I would do anything to have Yahoo/Broadcast.com move to QTSS. It's an obvious match. A company like Yahoo would want to differentiate its services, and it can do that with an open-source server based on internet standards. Yahoo could then develop a custom version of QTSS that meets their high end needs. RNWK cannot offer that to them, long term. With Quicktime being the basis of MPEG 4, and with the prevalence of Quicktime in Authoring, it is clear that the Real Networks solution is much more complicated to implement and maintain. It adds an extra step that QT4 makes unnecessary. This may be like Microsoft/Apple, but I think in this case, Apple is Microsoft, but with better technology. Think of marketshare for "GUI Desktops" in 1987, I'm sure Apple had 85% of that... I'll be interested to see what the RNWK crowd thinks. My gut instinct is that they will see it as not nearly as important as the general high PE selloff. Rich