Adaptec forced to adapt to a changing market place
By Carol Haber of Electronic news
Excerpts follow
...Adaptec is feeling the pain, like so many other cos connected to the PC market, of the low-end trend. Its high priced, high performance SCSI devicess are now a luxury. PC OEMs can ill afford as they try to eke a buck out of the ever-cheaper sub $1K machine.
The co is also reeling from turbulance in the priced-battered and oversupply disk drive market, for which it sells IC controllers. W/o wasting time (initial impact of the trend was felt at the end of Dec-ended 3rd qtr), Adaptec is severely cutting costs and searching for new avenues of growth. The low-end trend, so far, shows no sign of abatement.
Las week it said it would lay off 7% of the work force - mostly in the US (200-250 people) - and take a charge of $8- $12 MM. Both the layoffs and charge are expected in its 1st qtr ended 6/30.
At the same time, Adaptec will annonce relatively soon some significant moves toward new growth areas to guarantee future profitability.
Bruce Frymire, director of worldwide PR, told Electronic News: "The simpler office computer is forgoing some of its luxurious accoutrements it had in the last year or so, and the latest has been SCSI. Downward price pressure on the desk top computer biz has emerged as a chalenge for any co. that makes high-performance, higher-priced add-ons for computers as we do. We make SCCI host adapters. When the computer is priced at $800, it doesn't leave room for a performance accelerator and SCCI. OEMs have largely gone with alternative tech (EIDE) which gives them disadvantages, but for the short term, they seem to be willing to live with those disadvantages".
Meanwhile, Adaptec is "doing all we can in the near term to reduce cost." |
