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Technology Stocks : Applied Magnetics Corp

APM 1.370

-2.1%

Nov 6 3:59 PM EST

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To: Spots who wrote (11807)	5/3/1998 11:04:00 AM
From: T Bowl	Read Replies (1) of 12298

<<Also I keep having the sneaking feeling that SOMEBODY's got to make money off of disk heads. If you were (say) WDC, would YOU bet your business on buying heads from your competitors (IBM, SEG)?>> Spots - A few comments(from an APM bear). There is a lot of evidence out there that most people refuse to recognize... 1) There is ample evidence from all sources that the # of platters/heads per DD is decreasing. That by itself makes the DD makers as a better play than the indy suppliers. And then I certainly wouldn't risk buying the worst off supplier in the biz. 2) You're right, someone is gonna make money in the indy head supply biz. Unfortunately TDK/SAE, Yamaha and IBM are all ahead of the US suppliers by a least a few laps. They're the ones that are gonna make money. The Japanese suppliers have a LOT more experience with MR because of the early conversion by QNTM/MKE. IBM is just flat out kicking butt all by themselves as usual. That's simply cubic dollars. If you doubt the struggles of the US head makers take a look back at the notes about the SEG head struggles or even the recent struggles at RDRT with the 2.8GB generation. If that isn't enough and you want to hear an even more bearish read call CC himself and ask about the current state of the US based head suppliers... 3) SEG is no longer in the head supply biz. They abandoned that practice after the DecQ97 in order to firm up their relationship with TDK/SAE and RDRT. 4) WDC is the prize everyone is after. The fact that IBM and TDK/SAE are talked about as "one of our primary suppliers" is VERY VERY bearish for both APM and RDRT. Don't ignore this huge change. WDC has traditionally formed a close relationship with 2 suppliers(as opposed to a company like Maxtor who uses 3 primary). In the past they were APM and RDRT. WDC has taken on IBM and TDK/SAE for only one reason... And lastly, heck, APM wasn't even mentioned as a primary supplier to WDC!!! The only hope you have here in the near term is for a quick pop up due to short covering or something. Along those lines I would just follow what James does. He seems to have good timing(he did once anyway). Right now I'm praying for a little pop soon, because I currently don't have a posn in APM, but I don't want to short until $11+.. Puppet#1, todd

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