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

To: Steve Chang who wrote (12858)	5/20/1999 7:52:00 PM
From: benwood	Read Replies (2) \| Respond to of 16960

I was also long on SGI for a few years. My take on SGI: SGI graphics ran only on SGI machines, which peaked at around 6% share of the workstation market (perhaps 1% of total computer sales). As Wintel machines crashed in price, sales slumped. HP, Sun Micro, and DEC caught up in performance (or passed), and SGI sales slumped. SGI had repeated problems with production. They lost sales. (That's about when I sold). During SGI's heyday, they had a growing market share in a slow growth arena -- workstations were growing around 10-15% as I recall. But when they began to have a smaller piece of the workstation pie, the stock price crashed as it became clear they would be an also-ran. TDFX on the other hand has (for the last 15 months or so) had an increasing share of a rapidly increasing market segment -- the PC's with 3D accelerators. TDFX could conceivably penetrate 25-50% of the total computer shipments in the world in a few years as 3D accelerators become the norm, as compared to a peak penetration of 1% for SGI. Of course, TDFX may have it's market usurped by other factors that SGI didn't have to worry about -- Intel actually making co-processing for 3D unnecessary some day. I think that will happen, but not for several years at least. In a way, this is what happened to SGI -- competition in one form or another doing them in (well, they aren't dead yet...). Aside from that and the fact that TDFX specializes in graphics and SGI was known for hardware that borrowed from mainframe architectures and provided the best graphics platforms for a few years, I don't see many similarities. Now if TDFX produced complete PCs that had awesome graphics compared to everyone else, there would be a much bigger similarity!