SYQUEST Message Board - Msg: 3497798

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Technology Stocks : SYQUEST

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To: Michael Coley who wrote (5628)	2/22/1998 2:33:00 AM
From: Andrew Shih	Read Replies (1) of 7685

>>I think that a pretty good chunk of the SparQ COGS was probably some one-time or fixed-cost elements that will be missing next quarter or will not need to increase as production increase, but I agree that it's far less than the $10-$15 million mentioned. Maybe more like $3-$5 million. We could be wrong, though. Q2 should give us a much better view of SparQ's cost and margins.<< If they truly spent $10-15 million for SparQ start-up costs, then I'd have to really reevaluate the sanity of the management. SparQ drives & cartridges only sold 40K units last quarter. Let's change that to a yearly number of around 200K units (being generous), and that would peg the start-up cost at > $50 per drive/disk combo... (assuming no ramping of production) -Andrew

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