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

To: Patrick Grinsell who wrote (12272)	5/5/1999 4:20:00 AM
From: Curbstone	Read Replies (1) \| Respond to of 16960

FWIW just saw a palette full of V3 2000 PCI 16MB at Costco at $114. Curbstone

To: Patrick Grinsell who wrote (12272)	5/5/1999 5:02:00 AM
From: Patrick Grinsell	Respond to of 16960

In an effort to add value here... :-) I went back to look up gross margin for one of the largest wholesalers around, Ingram Micro. Gross margins are 6% of their 22 billion in sales for 1998. What does this mean? Ingram's cost is probably around $95-$105 for the Voodoo3 2000 assuming their price is $110 to resellers. Here are the distributor prices: V2-1000 $85 V3-2000 $110 V3-3000 $140 V3-3500 $200 Knock 10% off and you probably have close to 3dfx/STB revenue numbers. Looking at the shipment distributions for a WAG, ASP might look something like this for Q2 5% Voodoo2-1000 @76.5 50% Voodoo2-2000 @99.00 30% Voodoo2-3000 @126.00 15% Voodoo3-3500 @180.00 This puts ASP at about $118. This is about 177 million in revenue if 3dfx manages 1.5 million units. This is about par for the 500 to 600 million in revenue that analysts are currently spouting for this year. Given high expenses this kind of run-rate should yield a buck and change for '99. Piranha, so you wondering what makes my estimates different from everybody elses? Simply put I am weighting the last two quarters much more heavily. 3dfx shipped an amazing 1.7 million chips at retail and 300K for OEM for 4Q98. From a product standpoint it is my opinion that this WAS NOT 3dfx's finest hour. OEMs shunned Banshee for several reason (mostly no AGP2x). TNT took many potential retail sales because of Banshee just plain being outclassed. And yet 2 million chips were sold! So using the above asp of $118 and 2 million boards sold we have $236 million and about $1 per share for 4Q99 alone(same assumptions as before). It is my belief that it will be extremely clear who dominates at retail and OEM from a product standpoint. V3 is showing that retail boardmaker recognition is not that important. The only trouble spots left are execution and capacity. We shall see. Pat