Sam;
The key is the management. I felt AAPL would recover back then because they had gotten rid of the old management and Steve Jobs took over. He had already proven that he knew how to run and build a computer company but had lost an in-house battle in the board room and been kicked out. He was never one to win popularity contests. My only question, at the time, was did he have enough time left to do it? I guess he did. I do have questions about his marketing strategies in the future though. However, that's another discussion.
I think, it is the same story for Seagate, longer term. If the management knows its business and have a clear business plan Seagate will survive and prosper, no matter, what the market is like. There will be a winner in this part of the industry am I'm betting on Seagate. They seem to be the best organized and they have a dominant market share. It's my best guess but it's only a guess. The Japanese have lost tech.- price wars before in other areas. They don't always win. They lost it in semi-conducters back in the early nineties and then in RAM chips. I have been in their electronics factories, in Osaka. The conclusion I came to then was that they are very innovative, have very good engineering and high quality control in manufacturing but they lack the divine spark of originality that so characterizes hi- tech. American companies. It is a cultural difference. I do make one exception, Canon. Even Sony doesn't impress me, all that much. In the long run, that one difference will relegate them to the second tier. They are not necessarily the lost cost manufacturers, either but they can compete now because the currency exchange is their favor. If Greenspan lowers the Fed Funds rate and interest rates come down their DD's may not be an important factor or disappear from the market.
William Epstein |
