Quote from: elefter on June 22, 2013, 06:23:02 PM

Quote from: bitfair on June 22, 2013, 06:08:24 PM

I agree with this part:

Quote from: Mabsark on June 22, 2013, 03:41:34 PM

It should be blatantly obvious to anyone with half a brain that there's going to be a lot less income from hardware sales due to competition. That same competition will also decrease AM's share of the network hash rate.

However, I believe most investors have considered it too (particularly those with more than "half a brain"), and that it is priced into the share price at the moment. There's no surprise that there will be competition. But AM has enormous competitive advantages - they won't be able to sell at 50 BTC anymore, but their process (130 nm) is most likely cheaper than all competitors, giving them better profit margins on their products.

So the current monopoly-situation will eventually end, but AM has everything it takes to compete head-on with the competitors (and win) when they eventually arrive.

More compentition doesnt necesary lead to reduced hardware profits for ASICminer..

More competition does mean reduced hardware profits for AM. You clearly haven't thought this through.

Quote from: elefter on June 22, 2013, 06:23:02 PM

You asume that there wont be enough demand to buy every competitive product that comes out
its like you say if AM sold 1000 blades then the market is 1000 minners a pop i think the demand was much larger than what AM could cover and could absorve more mners than were actualy sold...

No, I'm not assuming that at all. I'm assuming that they sell all the hardware they have for sale (which is limited in number), but that they simply can't sell it at 2 Mh/s per USD because the competition is offering 50 Mh/s per USD. So, instead of selling a Blade for 50 BTC, they will sell for 2 BTC instead. That is what will cause the decrease in hardware sales.

Quote from: elefter on June 22, 2013, 06:23:02 PM

A compettive market with lower prices and easier revenuew of buying Miners would drive the sales way up for AM too...

It would if AM actually sold miners, but they don't. The only product AM currently sell is the USB miner which is just an expensive gimmick. They occasionally sell off their second hand hardware which they no longer want. The hardware they have for sale is very limited in quantity. They can't just sell all the hardware they have or they would have nothing left to mine with. AM need the hardware themselves.

Quote from: elefter on June 22, 2013, 06:23:02 PM

plus you asume that the cost of production of the second batch is the same as the first i would argue that the first batch had to cover a lot or development costs that the second one will not have thus giving a larger profit margin...

No reduction in development costs is going to make up for the 25x decrease in profit from selling hardware.

Quote from: elefter on June 22, 2013, 06:23:02 PM

In all that i am not sure that we have reached peak profits from hardware sales yet even if there is lots of competition in the future...

Then you clearly don't understand the situation. Let me try to make it clearer for you, with a simple example.

AM have a limited number of devices for sale. Previously they could charge 50 BTC per device. Soon they will only be able to charge 2 BTC per device. In order for profits to remain the same, AM would have to sell 25x more devices at the lower price. It can't do that though because those extra devices are needed for its mining operation. The obvious conclusion (and it is blatantly obvious if you just open your eyes and look at the situation objectively) is that income from selling hardware decreases.