Re" It appears
they consider IBM a bigger threat than qntm and wdc - IBM is vertically integrated
- the others are not. They are intent in boosting shareholder value - one direct way
is to beef up their software division, which has grown 53% annually for the past
couple of years - and possibly do an IPO in 1998. Asian currencey problems may
benefit them by lowering their costs in Singapore. They also are trying to boost
brand awareness. They have developed some TV commercials that they showed
us...look for them in the coming year."
I am long on SEG, QNTM and WDC, so take this in the sprit it is intended.
SEG has been dismissing QNTM and WD for 2 years as viable conmpetition, so these are rather self-serving remarks. If you talk to QNTM or WD they will say they fear IBM, but that IBM has never been able to move beyond a huge captive market-leader. In otherwords, IBM steals unit share, but QNTM and WD steal growth, and at times market share.
Of course they are intent on boosting shareholder equity - if they don't say that at this time they are really out to lunch. Will an IPO really happen for SGE s/w? Don't know, but this seems possible, if a little premature. It also leaves SEG exposed as it must then perform in DD biz, without the same type of high-growth/diversification that DLT gives QNTM. Software is probably worth hanging on to.
SEG has been spending money on corporate ads and branding for more tha n 8 months now. This is an important, but very expensive initiative that may come onder internal and external attack/review due to poor performance and need to reign in spending.
Asian uncertainty may benefir re currency valuation, but it is highly unlikely IMHO that it will benefit them overall. |
