Walter,
Thanks for the summary. Seems a lot of people here thinks it is doom and gloom time. But it doesn't sound like that at all to me.
Regarding the ''disappointing" earnings, Adaptec has *publicly* stated to anyone willing to listen that they were comfortable with the *low* end of the range of analysts estimates. Well, that is where they came in. I kind of think that people who shell out for 50,000 share blocks - and I have been seing a number of those cross the tape lately - are aware of this. Those are institutional investors who do their due dilligence and I sincerely doubt that they were caught off-guard by the earnings release. Maybe a lot of individual investors were, but I for one wasn't. I am quite content with the earnings the way they are and I do not see anything to panic about there. Adaptec is making money at a time when things are pretty tough. Don't forget that they had to absorb a lot of channel inventory this quarter.
I disagree with some of their statements. While I agree that the satellite adapters will be for larger commercial customers initially, I think it will eventually hit the desktop. And this may happen sooner than most think.
I'm also more than a little curious why there is no mention of 1394. Is management being coy or cautious? As digital cameras proliferate, this one has the potential to become a blockbuster. This is especially so if it is combined with a good CD/DVD solution and I believe Adaptec has that. I am sort of hoping they are saving a few juicy tidbits for the Apple Developer Conference coming up soon. That would be a good place to make an announcement.
Regarding UDMA, I agree that we have seen the worst. There just isn't a lot more performance to be had. You would need to go to IIO to improve on it and that just isn't cost effective when compared to a good SCSI setup. In some sense, SCSI can be considered a forerunner for a lot of these technologies. By the way, I have tried machines with UDMA and there is a significant difference in throughput and processor utilization. For a given amount of money, you can get more UDMA disk than SCSI disk, but if you need the throughput, you have to go with SCSI. Note that if people want to play with digital video - like what they would get from a video camera through 1394 - they really do need SCSI. Or UltraSCSI.
Sorry to ramble on, but I think today was pretty good. Sure, we could get a real drop tomorrow, but I don't think it will be long-lived. All the bad news I can think of is on the table. But Adaptec has also put some well thought out plans for dealing with it on the table. This *could* be a major turnaround and this without ever seing red ink. That's not bad at all compared with most turnarounds which usually need to loose large amounts of arterial blood before they see the need to deal with the problems.
Do your own due dilligence and don't take any of my ramblings too seriously. Yes, I own a fair amount of stock and I would love for it to go up to $50+ per share and that might be adding just a shade of rose tint to my glasses!
Cheers, Torben |
