<I wonder if you can clear one point. Regarding disk storage in routers. Is that just for holding routing addresses (that do not change very often) ? As far as I know writing speed on flash is still in the many milli-sec range. So flash is not suitable for frequent writing.>
I don't know.
<However one reason I am not totally despairing on disk drives is that the technology (heads, actuators, channels, media, etc...) is getting more sophisticated all the time. This will have 2 effects
1- hasten the departure of less up-to-date vendors.
2- make entry difficult for new players.>
7 vendors make 90% of the drives. You can't see much room for growth here unless one fails, or the world develops some new demand for more drives. If capacity can be brought on by simply using existing facilities, a single vendor could probably fail and there would still be no shortage of drives. Should these companies wish it, they could probably install double capacity in less than one year.
Interchangablity of drives means no one vendor can have a materially different product. Look at Quantum, who makes standards such as Ultra DMA. It gives them no advantage because if they don't give it out to all the other drive makers, the PC companies won't use it.
Is it really difficult for new players to enter the market? Probably, but why should they try when there's no chance of making profit? There was talk of Sony buying a drive maker. They apparently have great head technology, but why make drives when these companies sell below cost? One day though, Sony may put a disk drive in every TV. They could be as big a drive user as HP.
I look at myself and I think I should switch more investment to high growth areas with company specific value. I can't do that if I hold disk drives. So, I sell all these companies as it's a dead story. One can hope that all the bad is built into the price. Yeah, but is that really the best investment strategy?
Regards,
Mark |
