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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Linder who wrote (905)	6/7/1999 12:36:00 PM
From: Duker	Read Replies (3) \| Respond to of 1989

It is interesting to look at the U-4 and what it means to SEG ... I have no idea what the volume ramp looks like ... 3mm is probably as likely as 6mm or 500k at this point. I have no idea what they have designed in for margins and the ASPs that the article could be off by another 10% or so ... I think your thumbnail analysis is at the very least directionally correct. The U-4 does have a bit of a BFD (Big ---king Deal) stench to it in terms of the ultimate contribution to SEG. Still, if they are marginally profitable in that space, they are better off than MXTR/WDC/QNTM/IBM. That is a big deal. This is the first drive product in some time that SEG can point to and say that they saw a market opportunity and exploited it quickly and profitably (?). While Quantum is introducing a 6.8GB/Platter, GMR, 7200rpm Fireball Plus KX into a competitive desktop environment ... SEG is bludgeoning their BigFeet ... and presumably making some money along the way. I think the contribution of the U-4 will be better measured in time ... I hope it is designed to carry margins that make the returns at least close to the model ... if the ramp continues to go well and they are aggressive in driving down the costs ... the contribution could be even more meaningful. I guess I am most impressed by the fact that SEG was really forward-thinking a few quarters ago when the began the U-4 effort. Kinda makes you wonder where everyone else was ... --Duker