You're right. I was comparing apples and oranges. Still, I find it pretty interesting that SEG employs more than the rest of the American indy drive, heads, and media industry combined. My point remains that they are juggling too many balls and dropping one is devastating in a manner that isn't so for an outsourcer. At least as long as TDK makes superior heads, anyway.
Your point about FC is interesting. Reminds me of the gouging that boxmakers used to do with servers. For the desktop boxes, they would use Intel CPU and motherboard, and commodity everything else. Slap on a 20% or so margin, and they were done. Nothing essentially different with servers, except the margin was 40%. This cozy system started to unravel when Dell decided to break into the market, attracted by (what else) the overly-fat margins.
Notwithstanding all the hype about FC, let's not forget its still just an interface. It doesn't make your drive spin faster, increase your areal density, or get you a date on Saturday night. If all the drive makers agreed that it's in their best interest (it is) to charge a premium for an interface, they can make a pretty penny. But, as has been pointed out numerous times, drive makers are notoriously bad at price collusion. Just like what I'm claiming will happen to SCSI, FC will lose it gouge. Of course, it remains an open question whether the drive makers can extract a couple fat years in the interim. Finally, recall that the pricing flexibility derives foremost from them being niche, not mainstream, products. You never have pricing power with commodities unless there's a shortage.
p.s. I didn't know that WDC had 5% desktop share. |
