QUANTUM Message Board - Msg: 2715794

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Technology Stocks : QUANTUM

QNTM 7.240

+3.3%

Jan 5 3:59 PM EST

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To: Will Cunningham who wrote (4926)	11/13/1997 10:56:00 AM
From: Rob S.	of 9124

It's good to see the increased focus on the DLT business. Not many investors seem to understand Quantum's position in the MR head HD business. What is causing WDC and to a lesser extent Seagate pains in the HD sector is agressive price pressure coupled with the rapid shift to MR head technology. An article in the Motley Fool summed it up: fool.yahoo.com Unfortunately for Western Digital, Quantum (Nasdaq:QNTM - news) has already bought a good deal of the existing worldwide capacity for MR heads from TDK and Yamaha. With Read-Rite having difficulties in the transition and Applied Magnetics even farther behind, Western Digital's reliance on outside suppliers as opposed to the vertically-integrated, make-it-yourself models used by Seagate and IBM is now unfortunately going against it. As prices drop and make thin-film inductive less appealing on a cost-basis, without a firm supply Western Digital has become the odd man out in the drive industry. Quantum has "cornered the market" to gain market share from WDC and SGT. Their HDs are designed with fewer components and are easier to build and easier to automate (less costly) than older thin-film head HDs. The investment community should ask the question "Who has competitive product that competes favorably in performance and who is positioned to gain market share?". Also, the severe price competition seen from Fujitsu, which has similar but lower performance MR HDs, may not go unchallenged for long. WDC has indicated that their attorneys are looking into the posibility of filing a dumping charge against them. If that happens, all of the US HD companies should move up on the news. It would make sense that Quantum would move up the most.

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