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Technology Stocks : Disk Drive Sector Discussion Forum
WDC 181.08+3.5%Dec 19 9:30 AM EST
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To: T Bowl who wrote (7309)11/8/1999 3:58:00 AM
From: Z Analyzer  Read Replies (1) of 9256
 
<<These tell me that MXTR is not interested in using price cuts to gain share, in fact
they've said repeatedly that they would not do such a thing at the expense of margins.
I might be grasping here, but the potential combination of MXTR being the areal
density leader as well as the low price producer could prove fatal(hopefully) for
some competitors. They've been the bleeding edge leader for some time, but not
that the VL series is starting to hit the market full steam. It could also prove to be
a big problem for SEG. They ruled the "purpose designed low price" DD arena
for quite a while because they were first to market, but have they lost the edge?
>>
The first question is whether SEG ever had the edge they claimed. If their desktop gross margins were really neagative as seems likely (and this would be before allowing for any return on their considerable investment in all their component manufacturing), they certainly did not.
Second MXTR is also full of BS if they are now the price leaders while earning totally unacceptable margins (lest we forget this would be 10 or 12%, not 2%). You could only conclude they are after market share.
Can the price leaders withstand all this pain until a couple companies go belly up? -Z
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