Sam,
Few months ago, IDC, TrendFocus and DiskTrend were all forecasting for 18% to 20% growth through year 2000. 4Q97 growth was much lower than anticipated, I believe all three has since lowered their growth to around 15% range. What is more troubling is that the most explosive growth segment is in the lower end desktop for the <$1,000 PC market where gross margins are low. In addition, the big three domestic DD companies were still holding large amount of inventory (Seagate had over 2M FGI). 1Q will again be a difficult quarter. In the past, Seagate, Quantum and WDC were the ones fighting it out. Now, IBM, Maxtor, Fujitsu and Hitachi are also in the mix. This could be a much longer, bloodier, protracted battle. One should note that IBM, Fujitsu and Hitachi are major corporations with large cash reserves. Potentially, they may end out ahead which would not bowl well for the big three now.
I would consider IDC provides the best forecasts.
Happy Investing |
