Robert, Gentlemen;
<<Maybe the WDC recall will have a silver lining for the industry.
Is it possible that the PC makers will rethink their strategy of pitting drive makers against each other based on price? I can't shed any tears over the PC makers problem with this. They are largely to blame for commoditizing the disk drive. >>
Some comments about WDC. I agree with the assumption that WDC had no choice but to issue the recall. It is a kind of pain that cannot be deferred. But I do not think that the inordinate price pressures have been at the expense of quality. In general the MTBF of disk drives have improved in linear fashion over the years as surely as the areal density has risen and as surely has the price per megabyte has fallen. The kind of motor chip problem experienced by WDC is related to a process anomaly at STM Micro and is, frankly, a fluke. It really has nothing to do with "lets focus on price and not spend so much resource on quality". In fact, it was rigorous on-going life testing of a maturing product that found the weakness. In that sense WDC is to be applauded for their diligence but the testing they did is quite normal throughout the industry. Once again, the consumers are the winners.
I am also not quite in agreement with the notion that the PC makers hold sole responsibility for the commoditization of the disk drive. About 20 months ago I pointed out that over 10 million square feet of new factory space had either been finished or started in Asia in the previous 12 month period. That number rose to over 12 million sq. ft. within approximately 5 months after I first did the survey. I counted only heads, media, and disk drive production facilities. No one held a gun to the head of the companies building up that space. In addition, no one has told Microsoft et al to not introduce any new storage consumptive apps, "we are too preoccupied with thin client access to the internet, thank you very much". Did Dell do a bad or immoral thing by pioneering the build-to-order model? Not at all, they delivered a win to their customer base and were suitably rewarded with market share. This is how markets behave and I do not think we will find a true "robber baron" in the whole pack (but I would still keep an eye on Gates :)
In my opinion Western Digital is the primary candidate for lessening the burden on capacity for a simple reason, the same reason I was a WDC short last year: They did not execute and shift with head technology fast enough.
Now, a confession: to Lawrence Kam wherever you are, I was wrong or, at the least, you were more right then I was. Vertical integration, at the expense of time-to-market, is not a winning model.
Anyone read the Forbes article on IBM and Gerstner's "barbell" vision of the supply chain?
best,
Stitch
|
