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Technology Stocks : Hutchinson Technology, Inc.

HTCH 4.000

0.0%

Oct 6 5:00 PM EST

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To: jfrancis who wrote (1246)	5/11/1999 9:09:00 PM
From: Marconi	Read Replies (1) of 1487

Hello JFrancis: I think the market for disk drives will continue to grow as new applications in-fill for growth that may be flagging in traditional sectors. I have not looked at numbers recently, but I believe the venturing into new areas with IBM's microdrive or the HDD's large enough (with algorithms) for video as a download will be strong areas of growth. The first is tapping into appliances. The second into video, which has remained popular for nearly a generation and will continue to be so--people are visually oriented for stimulus or input. Video coupled with cable modems and other higher bandwidth services will allow the bandwidth to be used in 'off hours'. Other bandwidth hogs by present notions will follow on the heels of video. Not an immediate predictable pop for HTCH. But I think it gives foundation and footing to emerging markets for drives that will allow HTCH unit volume to continue to grow healthily. There will still remain the factor that HTI's learning curve is going to have to be nearly always a leader to obtain margins and retain the bulk of the business. That is HTI management. That's the balance that affects HTCH price quarter to quarter. Market demand should be smoothed over a 1 year to 2 year interval to capture product cycle smoothing. I don't run numbers for magnitude, but a 20-30% per year unit volume increase for HDD's is reasonable historically. I think that can be extrapolated based on emerging applications for drives at least 3 to 5 years forward. I do not believe there is a plateau looming in the next several years. That of course is discounting any major economic dislocation such as widespread war or man made havoc (NBC). Disk drives continue to be one of the best values year to year as a computer component, or more broadly, supporting buffering of digitized information for various systems. I hope this helps narrow my sentiments better. IOW the 'slow down' in enterprise computing is not significant overall in my estimation. Best regards, m PS the software angle is a hint to the software folks. HTCH is not involved directly with such software. The demand has been there for a many years. Digitized video is an ideal candidate for editing--both of commercials as well as repulsive content. In fact some one could set up an independent business to code digital movies for self-editing to a forms on the fly suitable for any desired view preference. Editing out the visual and audio garbage at a high standard of taste and decency might make a short clip out of some of the movies sold today....

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