Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 200.46

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Jan 9 9:30 AM EST

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To: Mark Madden who wrote (8445)	6/27/2000 7:39:00 PM
From: Gus	Read Replies (2) of 9256

Junkyard dogs don't get any respect.<g> 10% gross margins at the NAS low-end level are 2x to 3x the gross margins at the disk drive level. NAS-level revenues are priced at several multiples of sales ranging from ASPX's 1x sales (barely, hint: ailing NAS pioneer) to NTAP's 40+x sales while all the planets have to align for disk drive revenues to be priced above 1x sales with 2x sales the absolute top. It seems to me that the disk drive industry needs a leader who can impose a no drives, no arrays regime that will make all those low-end independents consolidate around them. dschoffelman398211 : How are smaller/newer NAS suppliers like Connex doing in the market? Steve_Duplessie : we don't focus on the low end, but my feeling is that if you don't make the disk itself, there will be no room for ya....... lhunt421761 : With disk vendors like Maxtor and Quantum directly entering the market, what will happen to the integrators? Steve_Duplessie : The low end of the market is going to be controlled by the disk manufacturers. Since 90% of the cost is the disk at that level, they are the only ones who will be able to survive. I expect a lot of the mid-tier integrators to evaporate because of these types. There just won't be any money in it. Leave it to a disk guy to take all the margin out of a perfectly good market. Message 13955757

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