SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Seagate Technology
STX 277.65-3.6%Dec 17 4:00 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: stock bull who wrote (4174)11/19/1997 6:45:00 PM
From: MKL  Read Replies (2) of 7841
 
I am new to this thread but know the DD industry fairly well. I just
read IDC's report on the market share and it shows why Seagate is
having problems.

1Q96 2Q96 3Q96 4Q96 1Q97 2Q97 3Q97
---- ---- ---- ---- ---- ---- ----
Total 29% 28% 29% 26% 26% 23% 24%
High End 53% 54% 58% 56% 54% 45% 45%

The high end is where Seagate was making most of its profits. They
have now lost 10%! Mostly to WD, QNTM and IBM. Also, Fujitsu is
making noise in this segment. At one time, Seagate was the only
player in town with volume availability. But all the other players
have increased high end offerings and capacity. While Seagate is
first to 10,000 RPM, people in the industry doesn't think highly of
the drive or there is a very small market for them. The other
features are more critical (areal density and channel rate). Also,
customers are very interested in reliability because these drives are
used in servers and Seagate is not know as the leader in reliability.

There was much talk that Seagate dumped desktop drives at the end of
3Q. This is true and they were at the lower capacity points where
there are low gross margins. Seagate desktop segment is also in
trouble due to bad designs and slow to conversion to MR technology.
Their profitable desktop drives were from the Conner acquisitions.
Now that they are reaching end of life, Seagate has not demonstrated
that their R/D team are capable of design new ones. I don't know if
they are spinning their wheels.

Seagate had resisted conversion to MR and stuck with inductive heads.
While this strategy of milking old technology was profitable in the
past, it is now beginning to show its problems in Seagate's bottom
line. The learning curve is expensive and it will continue to hurt
Seagate in the short run. The other DD companies are further ahead of
Seagate in the transition. I hear Seagate is trying to buy as much MR
heads as it could from Readrite because of its own internal conversion
problems.

It would be interesting to see when Seagate will turn it around, but I
don't see it in 1998.

Happy Investing
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News