QUANTUM Message Board - Msg: 3001733

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Technology Stocks : QUANTUM

QNTM 7.450

+3.0%

Dec 31 3:59 PM EST

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To: John A. Shaffer who wrote (6829)	12/18/1997 6:22:00 PM
From: Rob S.	Read Replies (1) of 9124

I remain out of the hard drive area and probably will until I see that inventories have been burned off. Long term the storage industry looks to have strong growth. For the next several monthsI think that capacity of DDs has exceeded current needs. That may change rapidly if some of the internet initiatives get put into place. Microsoft and Netscape (yes even mortal enemies collaborate on some things) and others have been reported to be collaborating on new internet software standards that would promise to greatly speed up that way information is stored and retrived. I am no expert in this area but I think the basic idea is to store from a few hundred megs to gigs of standard tectures and images that can then be quickly pulled from the disk manipulated and combined with non-standard content off the internet. This idea has been around for a while but since no standards exist it is not yet implemented. If it does get developed into a standard, then you should see the web development software and internet brousers using it. Once the huge standard set of stuff is loaded onto your hard disk, a web page developed to the standard could first check to see if your brouser complies with it and then request the information from the disk, manipulate it and splash it on the screen. This would augment and not replace the need for caching of custom image files and HTML. Another major trend is the move toward HDTV quality graphics display and storage capability. This should end up creating huge demand for high speed storage. Current laser DDs just won't be fast enough to store the 100 MB/second data rates of HDTV streams. To create, store, manipulate and forward all of the graphics information that will soon be created and converted will take huge data wharehouses, server storage systems, and personal system storage capacity. All the future stuff is fine but it doesn't help out much for the next 2-3 quarters. We have the compound problem of overcapacity and the Asian slow-down that are ganging up to defeat the best plans of Quantum for the short-term. I have considered buying Quantum now because the P/E and other valuations look very attractive. However, if HDD prices continue to take a hit for another couple of quarters, earnings will continue to come down to the point where the valuation changes. When we start seeing that prices have at least stabilized and inventories are being reduced, then it should be time to consider buying QNTM IMO. A tip off of this may be signs that PC sales to business and consumers is strong during the Christmas season. I think the trend in PC related sales is overall still positive but is reduced from expectations - until expectations again start ticking up, money may continue to flow out of the hard hit tech sectors.

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