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Technology Stocks : Applied Magnetics Corp
APM 1.070+0.9%Jan 2 9:30 AM EST
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To: Think4Yourself who wrote (10429)11/24/1997 6:37:00 AM
From: Pierre-X   of 12298
 
Re: Blaming Fujitsu

. Interesting line of reasoning KL. Why aren't you on the WDC thread? <g> We could use more bright peeps over there.

. If I understand what you, your hypothesis is that the glut of TFI HSAs/platters/assemblies should allow WDC to hang back on the technology curve and crank out a ton of cheap TFI drives, instead of climbing the technology ladder to MR.
. As a matter of fact that's pretty much what they DID in F97.
. Here's why they are no longer doing so:
1. TFI no longer has a cost advantage relative to MR. Reference low yielding 1.7G/P APM product.
2. Customers are looking for higher capacity points, which cannot easily be provided by TFI products. Drive sales below 2GB are now thin and thinning. Reference distributor and Disk/Trend data for evidence of this.
3. WDC needs to transition to MR sooner or later. Meanwhile they have a fixed facility base to use -- if they're cranking out TFI drives they would have to postpone the transition even longer, which could be very damaging. In a conversation I had with the WDC desktop division COO, she admitted that WDC may actually have delayed the MR transition too long.
. Fujitsu may not in actuality be dumping at all -- they may be burning off excess inventory of low end product just like SEG did in WDC's 1Q98.

PX
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