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It is all over the news paper and tv news channel for the last 24 hours. The law makers in the US has turned down the $700 billion bail out package. There apparently has been the perception that the bail out is for Wall Street. And, Main Street is not going to bail out the overpaid wrong doers. Hmmm ....
It is an unfortunate decision and can have devastating effect on the market. Simply put ... banks take your deposit at a percentage interest and they turn around and lend you deposit to people who borrows at a higher interest rate than what they are paying you, the depositors. Now what happens when your bank lends your money to borrowers who are defaulting and not paying back the debt they owe you? This is a very simple example of what is going on. Essentially, the US government has set very low interest rates for the last ten years and consumers have been borrowing at record pace. More specifically, they have been borrowing to buy real estates. In the US, the interest you pay on your mortgagee is tax deductible making it even more attractive to leverage yourself. It is all good as long as interest rate does not rise.
Than, there is the war. War is a costly exercise especially when the victor do not get the spoils of war as from annexing all the country's asset for themselves. In the old days when Rome attacks and takes over a country they own everything they took over. That helps the war cost as you get something for it. Attacking Iran and than go into a rebuilding mode with no end in sight is a costly affair. The US dollar comes under pressure as we saw the Canadian dollar soar against the US just like other currencies. The US government shore up the US dollar value by increasing interest rate so that their government bonds are attractive to buyers. A demand for US government bonds denominated in US dollars helps maintain a demand for US dollar and helps prop up the US dollar value. Off course, this can not go on forever. But, the real deal here is rising interest rates.
Now, put the top two paragraph together. Lots of home owners leveraged to real estates and sensitive to interest rate increase. US government raises interest rate to crate demand for US dollar. This is the toxic mixture.
The failure of so many financial institutions stems not just from Wall Street greed (there's lots of that) but from past government policies in interest rates and costly foreign policies. In the debate between the two Presidential candidates last week the moderator asked the question on what the new President would do in light of the economic crises, one talked about changing defense contract from cost plus to fixed cost and the other when on about what programs are important moving forward. Not one said anything about getting out of Iraq as a solution. Huh?
The current financial crises is NOW a government problem not a Wall Street problem. The major contributor has been the government. Wall Street just made financial weapons of mass destruction out of materials given to them by the government, which is low interest rate for the last ten years and than rising interest rates to support aggressive foreign policies that is blowing up financial instruments created in the last ten years.
It appears just being a law maker does not mean you know much about economics. The right wing Republicans held true to their belief of letting market forces determine the fate of private enterprises ... a noble position that reflects a poor understanding of the financial infrastructure and the current problem. The problem is systemic as the failure is wide spread. Wachovia is not Lehman or Bear Sterns. Wachovia is a bank and typically heavily regulated and risk adverse. Freddie Mac and Fannie Mae are mortgage lenders promoted by the US government to loosen their lending criteria. Many of these institutions are not driven by bright greedy people on Wall Street. But, they are in deep trouble and now are owned by the US government.
So what is next? It looks like Bush is going to try again and maybe this time some sense would prevail. There is no other choice. In the meantime, I am trolling the market for deals. Two micro cap that I like are Certicom and Points. I did buy some PTS yesterday at $0.59 and I though it was a joke bid until it got filled. Haha. My hold period is one to two years ... not a day trade strategy. Points have not been the same since the botched bought deal that saw millions of shares sitting in the participating brokers' inventory. While these guys are not making money yet they have built the largest loyalty exchange program in the world and it would be hard to compete against for new entrants. I do worry about the new programs where PTS is taking some liability in making a market for trading points.
I have always liked Certicom and have made money on a number of occasion trading in and out. Business will continue and the biggest challenge for Certicom's management is smoothing out the quarterly revenue and be profitable. Their technology will continue to be adopted by all US government suppliers as the NSA has made Certicom ECC one of the cornerstones of US security. There is also the law suit against Sony for patent infringement, which I am betting that Certicom would come out on the winning side. Listen, if the NSA has licensed ECC and you have not and is using it, you are guilty. In wireless security, there is no other solution that works with AES except ECC. Expect growth from wireless, licensing to government suppliers and a growing new patent licensing business. My top pick for myself at these price levels $.125 to $1.50. I do worry about the short term instruments Certicom is holding as they have a lot of cash.
Note: If you need the money you are investing in the next year or two you should not be investing in the stock market. If you cannot afford to loose, than you should not play. Pay off your mortgage first as that is also equity. Investing in the index is always safer than investing in companies. Buyers beware is alway true.
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Tuesday, September 30
The sky is falling! The sky is falling!
by
VRTourist
on Tue 30 Sep 2008 11:38 AM EDT
Monday, September 15
The end of the world?
by
VRTourist
on Mon 15 Sep 2008 02:07 PM EDT
The bad news continue to roll out with Lehman filing for bankruptcy and Merrill being bought out by Bank of America. Freddie Mac and Fannie Mae in trouble and government intervention required? Should we fear for the worse? What is worse? Oil prices at $200 a barrel? There seem to be no safe haven in the stock market these days. Financials are in distress. Commodities are plunging. Tech ... well we know what happened and it never really recovered. Is this the end of the world?
Hahaha ... you got to be kidding. Oil was never meant to stay at $140 let alone where it is at today. I think the spike in the oil prices is akin to a great analogy I heard over dinner about frogs and hot water. A frog will die in a pot of hot water if you turn the heat up really slowly. But if you turn the heat up high fast, the frog will jump out of the pot and run away. That is a good analogy to potential oil consumer behaviour in the future. Thank you Andy for such an elegant example. Oil shooting up 300% over a short period of time will change consumer behaviour ... they are going to jump out of that hot pot. GM knows this as all the hybird cars have been sold out and GM has no such product but gladly tell you, the potential hybrid car owner, that they are working on it and you should see it at your local GM dealer in 2010 (as advertised ad nauseously during the Olympics 2008). Cars is one of the largest consumer of oil and that is going to change. Some oil gurus see oil around $45 to $65 on along term basis. I would subscribe to that view. Financials? A once though to be the ultimate safe haven is now in distress. The sub-prime is taking its toll. So, who do you think these guys are at Lehman? God? yeah, they are normal people smarter than the average person but still prone to mistakes as its our human condition. I have never been a big fan of financial engineered products like Income Trust. I remembered a CEO whispering to me at his AGM about what I thought about becoming an Income Trust as my competitors at that AGM were seeking an audience with him to pitch converting to an Income Trust. I asked the CEO if he is growing? He said "Yes." I asked if he needed capital to grow? he said "Yes." Than, why an Income Trust pitch? Exactly ... there is a herd mentality in investment banking and true thinkers are rare. We now know what happened to Income Trust right? The government gives the government takes. The first mortgage backed asset (MBAs) was a great idea. But, after the eleven thousandth MBAs, the quality goes down. But, bankers know how to do it now and it makes them money so keep going until .... Stay tune as I expect more news to come and the situation to get worse. AIG was once the best investment in the portfolio management industry and just about every fund holds the stock. I remember my old boss faithfully attend all their meetings when they are in town. How times have changed .... The other market sector has been overshadowed by these broader problems. I think what we are seeing here are extraordinary events some say happens once every 100 years. I have a friend who believes he is cursed because everything he does goes against him. He called me up one day and told me he bought some shares in Carnival Cruise Line and said watch something bad is now going to happen. Within a week one of the Carnival ships caught on fire. He published a report on a company and the company had a flood that happens once every 100 years that badly impaired operations. So, 100 year events may happen more frequently? I don't know about you. But when the blood is gushing out on the streets, I get very very excited. It is a time to buy! The question is what to buy? Next installment .... Wednesday, October 11
More articles on the paper on the ATI/AMD merger
by
VRTourist
on Wed 11 Oct 2006 12:09 PM EDT
The papers today are yaking about rumours of an Intel/Nvidia merger and how it is going or how it is not going to happen. An Intel/Nvidia merger would certaintly POUR cold water all over anything that might be smouldering in the ATI/AMD merger. But, Intel has made acquisitions of graphics companies in the past and not much has come out of it ... it quietly died inside Intel as key people from the acquired graphics company quietly migrated out. Would acquring Nvidia make any difference? Nvidia is the biggest winner of the ATI/AMD merger! The destruction of ATI relationship with Intel is complete with the ATI/AMD merger. Note that ATI and Intel got a lot closer after CEO of Nvidia was on a major cover of a major business magazine quoting how much Microsoft is paying for graphics compared to microrocessors for their XBox. A year and a half later, ATI was first to market with a full PCI-Express solution (an Intel initiative) while Nvidia came out with a patch work. When Intel exited the integarted market, ATI was the shoe-in for the Intel customers left out in the cold (something Intel customers of non-core microprocesor products are familiar with going back to the i910 days - not sure if that is the right number as it could have been i920 or something ...heeheee...I am getting old and my memory is failing). I can only imagine the relationship between Intel and ATI to head south from this point on. Nvidia stands to reap the benefit as the choice supplier of graphics solution for the Intel platform. ATI and Microsoft have a great relationship as ATI is the sole and prime graphics supplier of the XBox360. I see this relationship as a competitive advantage for ATI as they wold be at the fore front of DirectX development, a critical technology defining component for PC and console graphics. But, Microsoft would now have to pay more attention to Nvidia as they are now position as the only independent graphics vendor for Intel PCs. Advantage of having Microsoft in your back pocket is now gone for ATI. Things can only get better for Nvidia as recent Microsoft announcements would indicate. The question now begs "Why? merge with AMD?" Is ATI feeling the heat of keeping up with graphics against Nvidia. I suspect not. These two companies are from the same cloth...SGI. All the engineers from the world leading graphics company, Silicon Graphics Inc., are now in these two companies. No, ATI is equally as competent in the art of 3D graphics as Nvidia. ATI announced reaching 100 million mobile phones in the last year, which aprroximately represents 10% of the mobile phone market...a very impressive accomplishment. On top of that, ATI announced the acqusition of a small mobile graphics company that brings along Nokia handset business. Tack this on to the Qualcomm and Motorola business and youwould ahve a pwerhouse in mobile graphics, which is the fastest growing technology segment in the world. Nvidia has nothing to talk about and their mobile customers are not a happy lot. So, why? why? why? There are many theories and only Dave can answer the question "why?" I can only think that running a huge public company that is constantly under the GUN to deliver never ending growth is a stressful thing. Yes, AMD is trying to get into the mobile market with SOC (system-on-chip) products and ATI would certaintly round off their technology component nicely. But, would it not be cheaper to license or do a joint-venture? We may never know the real answer but it sure looks like a sellout by ATI management cause I do not see any problems with ATI. Than again, I am not inside ATI where the picture may not be as rosy as I painted it In conclusion, as a hardcore gamer, I really see no major difference between ATI and Nvidia. You reach a point of diminshing returns. Most consumers would be happy with either product for their gaming activities. There is a certain lost from the ATI founders in the sense of jobs that will be lost and a great Canadian company gone. The success of being a dominant supplier to the mobile industry is a pipe dream. The players in the mobile industry is acutely aware of the dynamics of the PC industry and would do everything in their power to prevent such a monoploy (Wintel). Samsung, Motorola and Nokia have their own agenda and I can say seeing an Intel look alike in the mobile industry is not going to happen. Good Luck, Dave and Hector, on the merger. If there is a will, there is a way. Prove me wrong. Monday, March 20
Quick recap
by
VRTourist
on Mon 20 Mar 2006 11:04 AM EST
Not only have I been busy with WOW I have been busy with work too. The biggest change since I last posted was AMD increasing market share over Intel. Have you checked out AMD stock price lately? I sure wished I had bought some The last thing I want to say is PS3. When is it coming out? The latest news was Fall of 2006 targetting the Christmas period. Ah ha .... Sure .... want to try early 2007? They balme the delay on the HDDVD decision or something oblique like that. RIGHT.... how about saying we have no hardware and we have to now transfer paper and board models to silicon and it takes time. How about telling us the TRUTH? I did read a US based reserach report on the console market. And folks, this is a BIG brand name US broker. And, it sucks! The analyst is calling for the PS3 to be the dominant next generation console? Where did you get that idea? What was the PS2 claim to fame? Being out 1 year ahead of Nintendo and almost 2 years ahead of XBox? Hmm...looks like the reverse here now today. By the time PS3 arrives, XBox 360 would cover the store shelf with 360 games much like the PS2 when XBox was introduced. Its all about first to market with the most titles that is important at the end of the day - not the hardware. So, why do you think PS3 is going to be the dominant console? why? are you DUMB? Last I hear, networking was not going to be central for PS3 ... oh...bad mistake if that is true and yet another nail in Sony's console market. My call: XBox 360 would do to Sony what Sony did to Sega and Nintendo. Than again, what do I know, right?
Friday, September 30
A view being correct?
by
VRTourist
on Fri 30 Sep 2005 02:04 PM EDT
People will look for information that support their view and discard information contrary to their position. I believe I am no different The integration of XBox to PC is a HUGE advantage for Microsoft over Sony. Ultimatley, if the vision comes true, consoles will be able to play against PCs - And, I will put to rest once and for all that the PC gaming is the best gaming platform as I KICK the ARSE off my console friends. They will not know what hit them. Only time will tell
Thursday, September 29
$100 computing - again
by
VRTourist
on Thu 29 Sep 2005 05:31 PM EDT
The team at MIT came up with a niffty notebook for a US$100. It has a power generator that provides power on a ten to one ratio (one minute of cranking equals ten minutes of useage). There is an article here somewhere in this blog on the India initiative for a low cost computing device which can also be hand powered. I really have been too busy to look at the market. WOW has not been good in terms of family life and blogging and any other acceptable human endeavours. As my son says "Its evil." Me thinks that is a Spongebob term. As I looked at the market, I see the AMD and Intel moving up. Hmm... what did I say? Back to school, Christmas and end of year corporate purchase are usually big drivers for PC purchase. The microprocessor used by the MIT folks is based on AMD. My focus these days have shifted even away from PC computing. I am focused in the gaming (PC gaming and not gambling although that is what is putting food on the table) and mobile space. I am starting to see some validity in the gambling space after spending a week in London, UK. What a gambling culture! It is all true - there is a sports bet store on every block much like a mobile store in every block in Asia. I met some very interesting companies in the sports betting business. I can get into that ;-) I bet my colleague on who would get through the airport security first - just to give some excitment to a really boring and painful excercise everytime you fly. So, I can ethically support sports betting because it is fun and it makes the games more exciting. I cannot, however, support the casinos where the games are designed for the player to loose over the long run. And, they get FREAKING PISSED if you can beat the system. That is criminal behaviour as they really want the odds to be stacked against the player for the house. When we were in London, the week they won the Ashes, a BIG cricket tournament that the English have not won in 16 years, the sports betting went through the roof. OK back to work and WOW.
Wednesday, September 28
China and gaming - show me the money!
by
VRTourist
on Wed 28 Sep 2005 11:51 AM EDT
China's home grown MMOG (massive multiplayer on-line game) Yulang has reached 9 million users in just 2 months. BUT, they make no money on the sale of the game or the on-line connection. They make money from the sales of virtual assets like IGE. Bottom line - they make no money compared to WOW (World of Warcraft). The math for WOW is about $600 million in subscription fees and $140 million in product sales. This does not include the virtual auction market going through IGE and Ebay etc.... I did write a while back on the mobile opportunity in China. Last year at CTIA 2004 at the China Mobile Symposium, China had 260 million mobile subscriber. The total net income of all the mobile operators is a small fraction of the US market with a smaller mobile population, which I concluded that there is no money to be made in China. The economics in Asia is so different than North America or Europe. It is a high volume game with razor thin margins. But, China is adopting mobile technology that is ahead of Europe and North America. They already have mobile commerce with over 300 million Golden Wallets. Of course, it is a State related initiative. If we broaden our definition of gaming to the gambling space(the gambling sites like to call themselves gaming companies too), Party Poker generated close to half a billion dollars on the bottom line. It is a 4 year old company, folks. On-line poker is a game of skill and chance. Skill will prevail over the long run. So, we should view Poker on-line as a type of MMOG. This is where the rainbow comes down to the pot of gold In the evolution of gaming, with availability of broadband, MMOG is beginning to take momentum. An interesting article on Eve On Line illustrates some of the game dynamics of the future in MMOG. Closer to home, the success of WOW is all the validation needed to confirm this is one of the new gaming trend we should see grow in the space of gaming.
Wednesday, September 21
Broadband and Internet services ....
by
VRTourist
on Wed 21 Sep 2005 03:18 PM EDT
Keeping an eye on broadband deployment has been a favourite past-time of mine. Today, another report of broadband deployment was released. I have cut and paste for you from EE Times, a favourite news portal of mine.
EE Times: Latest News John Walko According to the Point Topic (London, England) report, there are now 47.5 million broadband subscribers in the EU — with 81 percent selecting DSL. This represents a third of all DSL subscribers. The U.K. alone added more than 1,543,000 DSL subscribers in the six months ended 30 June, bringing the total figure to 5,691,000 — a growth of more than 37 percent, the fastest rate in Europe and among the fastest in the world. Worldwide, a further 24.5 million homes and businesses shifted to broadband during the period, bringing the total to 176 million subscribers. DSL connections accounted for almost three-quarters of total broadband growth in the year, so far. The U.S. remains the country with the largest broadband population in the world, at 38.2 million subscribers. It has enjoyed 16 percent growth in DSL subscribers so far in 2005, compared with the 10 percent increase in other broadband access technologies, mainly cable modems. In terms of broadband penetration by population, South Korea continues to lead the way, with nearly 26 people out of 100 connected to broadband. Hong Kong (22.9), The Netherlands (21.9) Denmark (21.5) and Switzerland (20.1) make up the top five, with the U.S. coming in at fourteenth, with 13.1, and early leader Japan now in eleventh place with a broadband penetration of 16.2. As predicted earlier this year, China has become the first country to surpass 20 million subscribers. Of the established DSL nations, the fastest growing are Australia at 40 percent, the U.K. at 37 percent and Brazil at 27 percent, all among the 15 countries with over one million subscribers to broadband DSL.
First of all, Europe has very poor cable penetration with the highest penetration around 30% compared to the US at 60%. That is why Europe is so big on Satallite TV and DSl represented 80% of Broadband deployment in the UK. Broadband growth is a good sign for Internet service growth and maybe more optical boxes in the near future? The future of multimedia telecommunications is also bright with pervasive broadband. The real challenge is how broadband can impact the tradtional wirelinee telephony business. Who are going to be the telephony providers in the future? Is it a Vonnage like company? or a Skype? or an EBay or Yahoo? or your friendly Internet Service Provider? It seems like there is not a day VOIP is not in the newspapers. But, VOIP is only the tip of the opportunity. Video services and gaming are two to jump out right away in terms of services for the IP networked world. The ability to provide a broad array of services is limited by your imagination. The potential of new players in the telephony market has also increased significantly. This is where things get a lot more interesting .... with the growth of broadband. I am sorry I cannot give you more details as how the world will look as I m in the process of shaping it
Thursday, September 15
Views on the mobile opportunity from Europe
by
VRTourist
on Thu 15 Sep 2005 04:36 PM EDT
It is happening now. I just got back this morning (3 AM) from London, UK. My team and I spent a few days in London visiting about a dozen companies. And, yes, the trip was very productive and I expect a transaction to come out of it Mobile is rolling out. 3G services are available and as usual the first two areas to generate mooolah are adultainment and gambling (sports betting). Sports betting is an integral part of the British culture. While I am very against the Casino gaming, I do view Poker and sports betting as entertainment with some degree of skill involved and the participants are not going against the house, which is a real bad thing cause the house never wants the player to have a fair chance as the odds are stacked against the players over the long run - hey, they have to make money and buyers beware mantra should be noted. If you are not aware, wireless lottery is also available in the UK. The odds of winning the 6/49 in Canada is 14 million to 1. When the prize money is less than $14 million, the reward does not cover the odds. On mobility, the last meeting gave us the best overview of the mobile market. They are generating over a million pounds in turnover a month from sports betting. Adultainment is also big. The carriers are pushing reverse billings, which means the subscriber can pay for their adultainment on their phone bills. What was great was their view on the mobile market. In the early 90s, the first revenue generator was adultainment, Porn, and than on-line gambling. The mobile Internet is behaving just like the wireline experience - except adoption is going to be faster because people have had the opportunity to get use to e-commerce. This is an important view and assumption, which I think is valid. Alright, I have to go and get rid of my pounding headache. it is All Good in the mobile world....
Tuesday, August 30
That's gotta HURT!
by
VRTourist
on Tue 30 Aug 2005 01:51 PM EDT
I have not had much time to siff through the ruble on ATI but "That's gotta HURT!" Looks like a revenue shortfall and gross margin compression from inventory write downs - OUCH! What is really puzzling for me is the lack of discussion on the notebook market? Not a single newpaper article talked about it. The Company alluded to poor product mix and product pricing and it is all very confusing .... Sometimes the truth is better left on its own .... What is the truth? The real driver behind the problems? Pricing pressure on desktop? PCI Express inventory problems? I guess we would never know, eh? LOL...
Wednesday, August 24
Money going down the toilet?
by
VRTourist
on Wed 24 Aug 2005 11:24 AM EDT
I came across a story of a new graphics chip startup in Europe from some University - of course.... The buzz is about using DSP (digital signal processing) and how amazing this INTEGRATED soultion is going to be... YAWN... I met a startup in graphics about 7 or 8 years ago at Comdex. They had a little booth with Microsoft as a Microsoft Partner. Once I found out that they were a graphics company, I said "Are you NUTS!" They looked at me puzzled by such a comment. Than I quiz them on where they came from and guess what? They came from dead graphics companies. "So, you think you have something?" I asked (grinning). Make a long stroy short, I did see them a year or two later at Computex in Taiwan. They did have a few notebook wins. Where are they now? DEAD. Could have saved US$50 million, which was the last number I have in terms of invested capital. Here is my take on this new startup. DSP for graphics is an old thing- dudes! Have you heard of Chromatic Research, a company the Economist thought would change the world of graphics? The Economist article noted the number of Phds and Masters level employees in Chromatic. Ho! Ho! Ho! They are gone! Acquired by ATI who has nothing to show for. And here is the kicker - they are targetting the Integrated chipset market. Now I know, they are on Prozac. Hello? any body home? It never fails to amaze me how people waste money. And, you did think they do their homework? Now, I have some excellent properties in Florida - waterfront too ....
Tuesday, August 23
Word of mouth advertising - an old and true route to success
by
VRTourist
on Tue 23 Aug 2005 05:57 PM EDT
In today's Internet age, the buzz is all about on-line advertising. Look at Google and Yahoo and ..... We have forgotten the age old success recipe of "Word of mouth" advertising. There is really nothing more powerful than someone you know selling you a product or service that they have enjoyed. And.... my point? OK. It's about WOW. I when to the Rogers Cup with a friend who has a couple of teenage boys. Knowing I am a gamer, I talked about what is great (word of mouth advertising). I told her that her kids should try it. She said that her boys are aware of it because all their friends play it and they are asking her kids to join them. Well, I must have impressed her kids as the game they really want to play has now been endorsed by their mother's friend (me). Last night, they got the game and started the wonderful experience of WOW I met with a CEO of a very interesting tech company today. He knows I am a gamer and strangely enough the conversation drifted to WOW And finally, another example of Word of mouth advertising is "Go Daddy." Go Daddy is a private company providing Domain Name Service (DNS). If you want an Internet name you have to register it with someone like Go Daddy or your local friendly ISP or the thousands of cheap DNS out there. Go Daddy is considered the World Number 1 DNS provider with about a 16% market share. As I asked someone who got a website a few weeks ago who they used, they said "Go Daddy." "Why? Go Daddy?" I asked. Because someone they know recommended them - the service is good and the cost is low (hard combination to beat). While Go Daddy had a very controversial ad in the Superbowl and their second ad was pulled in the Superbowl after the first showing, it is the word of mouth that is driving their business. In a world where there is very little differentiation, Go Daddy has stood up head and shoulders above their competitors. Rumour is that there is an IPO in the works
Wednesday, August 10
Korea is leading the world on how a wired nation moves forward ...
by
VRTourist
on Wed 10 Aug 2005 02:42 PM EDT
I first took note of Korea's entry into the digital world in 1999 when news of their on-line gaming community being the largest in the world. Linage is a Korean MMOG, which today enjoys close to 3 million participants. This week Korea announced their entry into the VOIP world with a splash. They have implemented a 07 dialing VOIP prefix to all Korean land-line telephone numbers. Korea is reported to have above 70% penetration of broadband, which is a hugely amazing numbers. The World Cyber Games (affectionatley know to gamers as WCG) staretd in Korea and is now touring the world. Last year, this event was held in LA. It is in Singapore this year. The professional gaming industry started in Korea where the top gamers are paid large sums of money and treated like rock stars. The gaming nation had some very sad news today. A 28 year old man died after 50 hours of continous on-line gaming. Let's hope he was not playing WOW.
Monday, August 8
Chipset vendors doing well
by
VRTourist
on Mon 08 Aug 2005 10:17 AM EDT
I have copied the article from Digitimes because they no longer archive past articles for free. This is another saga on the rumours that Intel is moving out from the low-end desktop integrated market. My take is that business is really good and the fabs are running at capacity, which means some of the less profitable products would have to make room for more profitable lines.
Sales up for Charles Chou,
SiS, a chief supplier of entry-level chipsets for the Intel platform, may enjoy revenue growth of more than 30% in the third quarter, whereas VIA and ULi may see growth of more than 20%, the sources expect. In the first half of this year, SiS posted pre-tax profits of NT$434 million and NT$0.33, rising from losses during the same period of last year. Its gross margins also went from 23.9% in the second quarter of 2004 to 33.4% in the second quarter of this year.
With SiS also facing tight supply of PCIe chipsets for the Intel Pentium 4 platform, VIA has also had an opportunity to expand its market presence, market sources said, adding that VIA just began volume shipments of its Pentium 4-based lineup this year. VIA will soon introduce a new PCIe-compatible chipset series (PT series) that will be able to fill the gap as Intel drops its 915PL/GL lineup, according to VIA. The PT series is also expected to improve VIA’s ASP (average selling price), the company said.
ULi anticipates shipments of its southbridges (M1573/M1575) bundled with ATI chipsets will climb significantly from August, as the RC410 from ATI Technologies is currently the only chipset comparable to the Intel 915PL/GL series. However, K8-based chipsets will continue to be its major product line and the segment currently accounts for 50% of its revenues, whereas the
Source: companies, compiled by DigiTimes, August 2005. SiS, ULi and VIA: June 2004 - June 2005 revenues (NT$m)
Source: TSE, compiled by DigiTimes, Aug 2005. *Figures are not consolidated.
Hisotrically, Intel have a history of doing things that are not in the best interest of their customers. The first move that raise eyebrows was the decision to produce their own mobos (motherboards) back in the early 90s. Where is Intel on mobos? Well, like the low-end desktop integrated chipset, Intel has retreated after causing pain and anguish for their Tiawanese mobo partners. Of course, the latest pain they are inflicting is in the notebook integrated chipset market
The morale of the story here is that - the tech industry hates Intel. Do they know that? They must. It would be very interesting to see what traction Intel gets in the mobile space
Friday, August 5
How long are subscribers going to put up with netwrok problems?
by
VRTourist
on Fri 05 Aug 2005 11:27 AM EDT
The raging success of WOW is continuing to bring servers to a crawl. Last night, network response was above 500 milliseconds. Do you know what that means? It is like walking through a ghost town where there is no one but you. It means that you die if you happen to be in a melee situation, which happened last night. You cannot interact with the gaming environment. Draenor Realm, which is my server,when down at midnight. It came back up around 1 PM. When exactly, I am not sure. From a technology perspective, this is an ABSOLUTELY FASCINATING problem. Imagine 3.5 million subscribers logging on all at once .... Statistically, which is how we manage everything, the traffic ebb and flow is critical in managing the resource requirements. And, how are the servers and apps (WOW in this case) architected to minimise network and application latencies under load is ABSOLUTELY NON-TRIVIAL. These folks, IMHO, is one of the most exciting work in technology. As the Internet grows, the solutions here can be applied everywhere. This is critical problem of the new world. For those who solve it - the world will be at their feet.
Thursday, August 4
US falling behind in broadband
by
VRTourist
on Thu 04 Aug 2005 10:56 AM EDT
The Internet, we like to believe, was created in the US. Well, it was created in the US. Here is an article that reports 75% of South Korea households have access to broadband. It is not about who has more broadband users. It is about the world largest consumer not having the options to spend more. Many of today's new Internet services assume broadband is pervasive. As an example, IPTV (Internet Protocol TV) uses a lot of bandwidth. Podcasting consumes bandwidth. Distribution of software and updates consume bandwidth. Sharing digital pictures consume a lot of bandwidth. You get the picture? Back in 2002 in the darkest days of networking, the only people talking about building networks were the Japanese, the Chinese and the Koreans. I know because I was working with some of the optical box vendors (a breed that is on the verge of extinction in North America). VCs have walked away from $200 million investments. That has gotta HURT. It looking more and more the case that Morth American and European companies will have limited upside in the network growth in Asia with Huwaei becoming more of a player in networking. I will say a prayer for Nortel. Odds and Ends: On wireless, there is a report that expects worldwide cellphones to reach the 2 billion subscriber mark. Intel was reported to have paid a US$100 million for Oplus, a fabless video Israeli stratup with a parallel processing graphics architecture. This has implications for ATI & Nvidia - more ATI as they have the best video processing technology as in their AIW (All-In-Wonder) product. But they have been many attempts to use massive parallel processing architecture in the past and failed because it requires a fundamental shift in the programming architecture or mindset to take advantage of massive parallel processing. Good luck! Intel. As I surfed some more I came across this. I did advised the PixelFusion folks to abandon their graphics strategy - LOL, here is the story. Networking is where it is at for massive parallel processing and that was what PixelFusion tried to do after we met. I will always remember that meeting in London as it started at 7 PM and ended at 10:30 PM. I started at 7 AM and jetlagged from North America
Wednesday, August 3
Lots of stuff today to chew on ....
by
VRTourist
on Wed 03 Aug 2005 11:54 AM EDT
Rumours are now floating that Intel is exiting the low-end integrated chipset market. Hmmm... ;-) if this is true, than the processor business must be very good and Intel is too successful in their integrated chipset products. Last time I looked, Intel owns the low end PC desktop market with their integrated chipset. For the uninitiated, the chipset here is the chip that sits outside the processor and essentially direct traffic. The integrated chipset means that it also provide graphics function. It is only a rumour so far. Data from the semi industry is flowing today. At a high level, June 2005 was down 2.2% from June 2004. But sales for the first half of 2005 was up 6.5% from the first half of 2004. DSP sales was up 20.4% for the month of June but is down 1.9% for the first half of the year compared to last year. What was interesting was the stronger uptake of DSP in North America.While automotive sector showed the strongest growth, DSP are consumed primarily by cellphones and base stations. It appears North America is pulling up the slack on cellphones as China appears to be working through an inventory glut. Just a reminder, keep an eye out for the 3 to 5 MegaPixel camera phones for North America in the back half of 2005. More personally disturbing news came from Microsoft beta Longhorn called Vista. It appears that Longhorn will have copy protection that require a new monitor with the right hardware to view the encrypted video stream. Can you FUCKING believe that! It better be a freaking joke. Unfortunately, I have a good sense on what technology Microsoft is using and sadly it is very hard to crack. In a recent review of DRM (digital rights management), Microsoft DRM has not been cracked unlike the popular Apple's Fairplay - LOL (laughing out loud).
Tuesday, August 2
Have you taken a look at Dell notebooks?
by
VRTourist
on Tue 02 Aug 2005 11:05 AM EDT
This morning I picked up the papers and saw a Dell ad. They had 4 notebooks below $1,800. I thought I did check the specs on these babies. And, all 4 notebooks were using Intel Integrated graphics solution - OUCH. It was a clean sweep of the low end. The notebook models above $1,800 had discrete soutions from ATI and Nvidia. But, below the pricier models look to be all Intel. This is a noteworthy trend. I did expect the shift to be over the next two quarters and than it would stablize to a longer term trend (40% to 60% Intel integrated solution on Notebooks with the remaining up for grabs between ATI & Nvidia). For Nvidia, it has little impact - the shift to XBox 360 will be more painful for them. For ATI, the changing notebook market is going to be the pain point, which is now and the next two quarters. Even when XBox 360 kicks in, the top line will be challenged as the notebooki market has a higher ASP than revenue per unit of XBox even though it is more profitable. At best, revenue could look rather flat. I be a bit patient on this one and there is money in here some where
Tuesday, July 26
OMG!!! Really?
by
VRTourist
on Tue 26 Jul 2005 09:41 AM EDT
Oh My God! (OMG), Tell me this is true ;-) It appears that Sony has shipped 91.62 million units of PS2. "The firm told an audience that 91.62 million PS2 units have been shipped worldwide thus far, with 37 million of those going to North America, 33.21 million to Europe and a further 21.41 million units going to Japan and the rest of Asia. . North America gobbled up 395 million of the 863 million games sold worldwide with Europe consuming 292 million and Japan and Asia the remaining 176 million. The total number of PSone and PS2 games sold is 1.822 billion, of which 767 million went to North America, 594 million to Europe regions and 461 million in Japan and Asia." "Excerpt from The Inquirer" These are amazing numbers - cha ching ching.... Now, do we understand why Microsoft is willing to loose so much money on XBox. You know the prices of the console and the games - do the math. The Tech Market is heating up - finally! TI results last night was great. Cell phones are still moving and we are waiting for the 3 and 5 MegaPixel phones to hit North America in Q4/05. I can hardly wait. While the semicondutor companies continue to chug along, the enterprise software vendors are struggling. I had pronounced the enterprise market dead 5 years ago. I just cannot imagine what new applications the enterprise need that has not been done. We have ERP (enterprise resource planning - the digital nervous system of today's corporations), office suites (wordprocessors, etc...), MRP (manufacturer resource planning), databases and .... Well, they may be another kick at the can with a new operating system. But, Longhorn is still a year away and it take a couple more years before the corporate world adopts that. We are still, however, talking desktop and not enterprise server solutions, which is where a lot of enterprise vendors' product reside. It is ugly and it is struggling. They are all hopping the regulatory environment is a stimulus for future product sales. The shift in technoology has started. We are at the same point as the mid-80's where PC adoption was starting. I am talking about the new platform for computing - mobile computing driven by smaller faster and cheaper. The first beneficiary are the carriers and we see increasing profitability with growth in wireless data. Wireless data has already generated huge profits in Europe with SMS. Today, wireless data comes in more flavours than your favourite ice crean shop. This is where the growth is and this is my focus I have been to busy to look at specific stocks lately. Pay attention to the companies in wireless, VOIP and Internet services. Ooooooh.... that is a nice phone. have you seen the Razrberry launched last night? Very nice. Many of the chat discussions are around what it does not do, which were WiFi and 3G. It seem that the world is ganging up on a Canadian company. Life is just not fair, eh?
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except I think I am always right or seldom wrong - LOL. 
And I can hardly wait. 