"On the flip side, if you agree that QNTM's DD margins are lower than WDC then, given WDC's aggressive push into the high end, is there any reason to expect WDC not to make big market share gains there?"
QNTM's DD margins have been lower than WDC's, but a good part of that is the fact that QNTM has been blending DEC's drive business in their own over the past 2 years, as well as transitioning to MR technology; therefore, the comparison isn't exactly apt. WDC's margins have been better too because they have milked TFI technology, and are just now transitioning into MR and into enterprise drives.
We could turn your question around and ask, Is there any reason to expect WDC to not have any problems in this transition? Also, WDC has been a more focussed company than QNTM, with fewer product offerings. Now that they are about to expand their product offerings (although in the plan they announced yesterday, they are chopping some out, which, IMO, is a good thing for them not a bad one), they may not get the same margins as they enjoyed in the past. At the very least, it is a question and a challenge for them to meet. |
