Seagate Technology - Fundamentals Message Board

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Technology Stocks : Seagate Technology - Fundamentals

STX 237.60

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Nov 21 9:30 AM EST

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To: Frodo Baxter who wrote (280)	12/4/1998 9:59:00 AM
From: Robert Douglas	Read Replies (1) of 1989

Lawrence, You have mentioned twice that GB capacity is the relevant number to look at when analyzing capacity related issues. I don't agree. Unit productive capacity is the relevant number to look at. It captures all the necessary supply/demand and capacity issues related to disk drives. After all drives are still sold in units! Just because advances in technology allow the same plant to produce twice the GBs this year when compared to last doesn't mean that “capacity” has doubled. As an example; if the same resources this year now produce a 20 GB drive it does not satisfy two users who each demand a 10 GB drive. Areal density is more analogous to quality issues in a product like an automobile. It may eventually effect unit demand by slowing the replacement cycle but this is all. Don't fall into the trap of analyzing a discrete product like you would one that is infinitely dividable. -Robert

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