Thanks. Yes, interesting article. For the moment, this is not the main worry. Right now, all the storage stocks are down because their customers aren't buying. Once the macro picture improves, IT budgets will come back, and NTAP's and EMC's profits will snap back up to the previous trendline. The current decline in EMC's margins (pretty dramatic), is due to demand weakness, causing EMC to try to hang onto market share by aggressive pricing. It (decline in margins) is not (yet) due to commoditization of the industry. That is, I don't think the recent margin decline is the start of a LT trend.
Once the stocks are back in favor, however, investors need to worry about the possibibility of commoditization, down the road.
I'm briefly back from vacation, leaving again for another week. I've cancelled all my pending orders for 2003 LEAPs. We are so close to having the NTAP 2004s available, and I would rather hold them, so I think I'll just wait. Besides, it looks like I'm going to get my price to start buying EMC 2004s (= stock at 16).
JS@goingsailing.pov |
