Z, et al;
<<DDs are a commodity or not?>>
Guys, lets face it, disk drives are not a commodity. The steel, aluminum, copper, and gold that comprise the material in them are commodities. This notion of DDs being a commodity actually goes a way back. I have no idea who first said it but the use of the term was intended to show the volume dependent nature of the business where yeild and critical mass were so important coupled with the intensive pressures on margin, born more of competition then any other single factor. This dichotomy of high tech/ low margins has been at the heart of what makes building disk drives so difficult. Few other segment of the high techs are quite so margin pressured exceptions being end of life chips, d-ram, and monitors. Most other peripherals enjoy gross margins substantially higher then disk drives. The components in disk drives, for example, always get higher margins.Its one of the reasons I say the rubber meets the road in this sector with the manufacture of heads and media. That is where the real technical and economic fulcrum resides. (Some nod to the channel designers here, but they tend to lean heavily on the heads and media anyway IMHO.)
Best,
Stitch |
