Has anyone listened to the QNTM CC yet? I found it to be a very strange call. Here we are on the cusp of a dramatic split in the stock, and there wasn't one question on it! Indeed, the questions seemed to be cut off rather abruptly. Was MB getting upset? He was talking a lot about the price war, and how he was afraid that it would NOT provoke consolidation, it would just impair profitability and investment in the sector for a prolonged time. In fact, he sounded a little like Mark has begun to sound in the past few months about this sector.
He also said that "someone was trying to double their market share" by price; does anyone know who that is? It can't be Seagate; they couldn't possibly double their share from here. MB said that he doesn't think that share changed much this past quarter, everyone successfully defended it. But then he also said that QNTM reduced their buildout, as did a couple of other companies. If that is so, that is the first step to losing share, and it wouldn't discourage someone trying to gain share and provoke consolidation (i.e., bankruptcy most likely) by price, it would only encourage them, especially if it is a company like Samsung or Fujitsu who have used such tactics successfully in the past (especially Samsung in the infamous DRAM arena).
Did anyone else think that somehow MB sounded naive about all this? Or am I being naive? At least one of the analysts asked him how do we get out of this, especially with the PC companies hurting the way they are, they are going to continue to play one supplier against another and get as much of a price break as possible, and MB seemed to say that they don't just buy on price, they use other considerations as well. Well, yes of course to some extent, but if the next guy is getting their drives for $10 less, you better get yours for that too or you'll be like CPQ is now, hurting.
Comments please. This is just a first reaction, I'll sleep on it and see what occurs to me. Hope this doesn't appear too silly to me in the morning.
Regards,
Sam |
