techweb.com
Excerpts:
Takata has picked his winners and losers. "Seagate is
probably in a very strong position to survive, and likely
to emerge stronger than ever," he said. "After the
shakeout, Quantum is a very strong vendor with its
strong Japanese partner, Matsushita-Kotobuki
Electronics, to make the hard drives. Western Digital
is probably my third pick."
Quantum, Seagate [SEG], and Western Digital
[WDC] comprise 75 percent of the desktop market,
and 62 percent of the total market overall, analysts
said. For the first nine months of 1997, Quantum
shipped 6.6 million units; Seagate, 7.8 million units;
and Western Digital, 6.2 million.
Quantum in particular, with 60 percent of its profits
coming from its tape-drive division, is well-positioned
to meet increasing consumer demand for that kind of
data storage.
Patrick Tenney, an analyst at Robertson Stephens,
based in San Francisco, likes Seagate. "This is a good
business -- it's also very cyclical and very seasonal,"
he said. "Seagate will emerge from this down cycle
stronger."
Of the three, Western Digital is in the weakest
position. "Western Digital has the least vertically
integrated of any of the companies," Takata said. "It
has the least control over its own technology,
depending on outside vendors for technology such as
heads. Therefore, Western probably needs to do
something to shore up its technology portfolio, or
either acquire or get acquired." |
