Dennis;
<<Is it possible that the indy's are getting together to avoid the demise you plan for them because they are not part of the vertical solutions within the DD industry players?
Could it be that an endangered species can figure out a new food source>>
I am not sure I follow this question. Are you asking me if there is potential for mergers? If so the answer would be yes, there is stronger potential for mergers today then there was before the latest round of killer competition IMO. By the way, I am not really planning their demise for them. They seem to be doing ok on their own.<G>
Several things trouble me a lot. There is persistent talk that SAE/TDK is making money. There is, of course, no way to know this for sure but it comes up persistently and from pretty senior folks. I am also hearing that yields are improving at QNTM and SEG. That can't help. Finally I am hearing good things about ALPS production. And we know that Fujitsu has been investing heavily in their own MR and GMR production. I keep tallying all this up and just do not see it going well for RDRT. Tougher competition, declining heads per drive, softening DD growth rates, intense margin pressures (in the whole food chain), higher frequency in technology shifts, key customer weds the competition (WDC/IBM), the list seems formidable. I keep coming back to the same point. Is this where I want to invest given the alternatives. Dennis, sorry I can't offer a brighter picture.
My recommendation? Go take a look at NMGC or AINN. Or puruse the small caps. Then about Christmas time come back and take another look at the DD sector.
Best,
Stitch |
