QNTM had guided analyst downward for the next quarter.
I appreciated that very much, to tell you the truth. Another "buying opportunity" for me.
If you look closely, QNTM has actually done superbly. Profitability in desktop at 118 ASP, -8% q/q. Volume ramp in high-end. DLT drives and tape, awesome. DLT license, pure gravy. ATL, actual synergy achieved! As always, class act asset management, quality, and cash flow generation. They could buy Maxtor tomorrow without breaking a sweat. I wish they would.
As to why they were conservative, others in industry are trying to gain share on pricing again (yes Chuck, we all know it's you). But you gotta be pretty incredulous to swallow their b.s. that June Q would be weaker.
1) OpEx this quarter inflated by year-end bonuses, multiple launches, Terastor revaluation. This alone is good for a few pennies.
2) Time-to-market across all segments of marketplace:
FB CX- only shipping drive at 6.8/plate
FB+ KA- time-to-market, 7200rpm
Atlas IV- time-to-market, highest areal density, should be low-cost leader
Atlas 10K- will increase marketshare in this segment (currently 0. Seagate owns 90+% of this space)
Also, they have always been ahead of the curve in understanding their role in the supply chain. That's why they've done more than any competitor in getting out of the manufacturing business, which keeps CapEx very low. Quick turns, quick ramps, quick asset turnover. Now, they've realized that there is an opportunity to supply "storage systems" to the enterprise OEMs, which are absolutely delighted to outsource the R&D involved but want to retain the ability to brand, sell, and support these high-margin behemoths. There is no doubt in my mind that despite their denials, they are lusting to get into the RAID business. Why go head to head against EMC when you can supply the artillery to IBM, Compaq, HP and Dell? |
