This is how I derived the numbers. The example here shows details with 20% cost reduction and various asp changes. If anyone finds any mistake, I appreciate if you could correct me.
| Gross Margin gm | 58% | 58% | 58% | 58% | 58% | 58% | 58% | 58% | | ASP change p | -40% | -30% | -20% | -15% | -10% | -5% | 0% | 0% | | Cost change c | -20% | -20% | -20% | -20% | -20% | -20% | -20% | -20% | | Bit Growth | 50% | 50% | 50% | 50% | 50% | 50% | 50% | 0% | | Expected NAND GM=1-(1-gm)(1+c)/(1+p) | 44.00% | 52.00% | 58.00% | 60.47% | 62.67% | 64.63% | 66.40% | 66.40% | | | | | | | | | | | HDD Rev (mil) | 10,500 | 10,500 | 10,500 | 10,500 | 10,500 | 10,500 | 10,500 | 10,501 | | HDD EPS | $4.50 | $4.50 | $4.50 | $4.50 | $4.50 | $4.50 | $4.50 | $4.50 | | NAND Rev (mil) | 10,500 | 10,500 | 10,500 | 10,500 | 10,500 | 10,500 | 10,500 | 10,500 | | NAND EPS | $9.00 | $9.00 | $9.00 | $9.00 | $9.00 | $9.00 | $9.00 | $9.00 | | Current Total EPS | $13.50 | $13.50 | $13.50 | $13.50 | $13.50 | $13.50 | $13.50 | $13.50 | | Expected Total Rev (mil) | 19,950 | 21,525 | 23,100 | 23,888 | 24,675 | 25,463 | 26,250 | 21,001 | | Expected NAND EPS | $6.14 | $8.47 | $10.80 | $11.96 | $13.13 | $14.29 | $15.46 | $10.30 | | Expected Total EPS | $10.64 | $12.97 | $15.30 | $16.46 | $17.63 | $18.79 | $19.96 | $14.80 | | Total Rev. Growth | -5.00% | 2.50% | 10.00% | 13.75% | 17.50% | 21.25% | 25.00% | 0.00% | | Blended gm | 36.63% | 41.27% | 45.27% | 47.08% | 48.77% | 50.35% | 51.84% | 48.20% | |
