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Technology Stocks : ATI Technologies in 1997 (T.ATY) -- Ignore unavailable to you. Want to Upgrade?

To: Sleeperz who wrote (3369)	5/8/1999 10:15:00 AM
From: SBHX	Read Replies (1) \| Respond to of 5927

Everything has to do with windows and timeframe. If you talk about long enough time horizons, then anything is possible. This is why, if I say : there will be a severe market correction within 2 yrs, I have a very good chance of being right. If we look at the rate of innovation of what is happening in terms of graphics performance and features, it is still more than doubling every year. In such a climate of dynamic change, I doubt if it will become as 'commoditized' as you think (soon). As for the lower end of the market ($399 PCs), that growth was widely anticipated, however, the shrinkage at the consumer/entertainment power-user PCs did not materialize as some feared. In fact, all segments are still growing. The explosion in the $399 PC segment did two things : 1. it just introduced PCs to people that otherwise would not have bought a computer. 2. it allowed some people to buy 2nd or 3rd machines to supplement their 1st faster and more feature complete PC. 3. people who always thought they 'really needed' that PIII-500, still bought them despite the $399 PCs because there is a differentiation in terms of capabilities. If we're so convinced that graphics becoming a commodity is just around the corner, then we should divest completely from this market. Look around at what goes into the PC today. The only things that are still evolving quickly are the CPU and graphics. If even graphics is a commodity, then that leaves only the CPU as the area of growth. Which means : either buy intel or skip the entire industry. Can you imagine that happening? Somehow I suspect there's still a couple of years left before the graphics performance/feature requirement starts to flatten. And even then, we'll be seeing the PC-industry evolve or merge into something else. As for investing in ATI. If you believe in their business strategy, you must believe that they are planning for that day. Look at their announcement of SOC :: because they have been extremely profitable, and have a steady revenue stream, they are able to worry about longer term growth plans than the firms that are just struggling to meet payroll. Nothing wrong comparing it with other graphics companies or other cyclical commodity PC suppliers like the HardDrive stocks. They all once had their day in the Sun when things were good. You just have to back far enough.