Took small positions in both STX and WDC. Looking for sub-10 before going bigger on STX, and looking for sub-5 before going bigger on WDC. Looking for sub-3.5 to initiate a position in MXO.
Ever since Napster and other media-sharing apps like Kazaa emerged, I assumed that HD firms would do well. It's surprising that all seem to be doing crappy due to pricing pressures.
Still, it's clear that that demand for HD will be enormous, driven by:
1. Broadband file-sharing - people downloading gigs of music and other media. Thanks to broadband, porn, and Kazaa, you can probably fill up a 250 GB drive in a matter of months, if not weeks.
2. DVD ripping (and subsequent file-sharing). I know people who subscribe to Netflix and rip every movie to HD. Again, doesn't seem too difficult to fill up a 250 GB HD.
3. Security - Cameras writing to HDs rather than VHS videos. At least 3 benefits with security: (1) Shift from VHS to HD to recording; (2) With VHS, you could only tape a day or two before overriding the tape; With HD you can tapes months of activity; (3) Increasing use. Instead of 5% of the population using security cams, we could shift to 25% of the population as more residential users start using cams.
4. TIVO - Again, 250 GB doesn't seem like very much given our couch potato population.
Basically, everything that used to be stored on VHS, cassette, and other analog media will over time be stored on HD devices. Shouldn't STX, MXO, and WDC benefit from this shift? |
