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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mark Madden who wrote (7679)	1/3/2000 1:24:00 AM
From: Mark Madden	Respond to of 9256

Here is a weekend report on disk drive pricing from a sample of retail distributor drives. The drives include 222 samples from 4 different distributors. Disk drive pricing remained stable last week. The weighted average desktop drive price dropped 0.1% last week. The average price of drives less than 11 gb dropped 0.3%. The average price of drives between 11 and 21 gb increased 0.3%. The average price of drives over 21 gb dropped 0.4%. The average SCSI drive (enterprise) dropped 0.5%. The weighted average desktop drive price dropped 1.8% for the last month. The average price of drives less than 11 gb dropped 0.5%. The average price of drives between 11 and 21 gb dropped 2.0%. The average price of drives over 21 gb dropped 3.7%. The average SCSI drive dropped 1.0%. The weighted average desktop drive dropped at the monthly rate of 1.5% since the beginning of this quarter. The average price of drives less than 11gb dropped at a monthly rate of 0.7% for the quarter. The average price of drives between 11gb and 21 gb dropped at a monthly rate of 1.3% for the quarter. The average price of drives greater than 21gb dropped at a monthly rate of 3.2% for the quarter. The average SCSI drive price dropped at a monthly rate of 2.7% since the beginning of the quarter. What does this mean? I am not sure. The stable prices throughout the quarter are encouraging but the prices began the quarter very low. If the stability in prices was caused by increased demand then earnings could improve because of increased units improving margins. The introduction of drives with high-density platters may improve margins but these drives hit the distribution channels fairly late in the quarter. Since the distributors sell less than the third of the total drives sold, the OEM?s are more important for earnings. Perhaps the OEM?s purchased drives with high-density platters before they were introduced to the distribution channels. Another factor in the quarterly earnings will be efficiencies brought on by reducing unnecessary costs and increasing automation. Plant closures and RIF programs may have some impact. I guess the quarter will be better than initially expected but not a huge surprise on the upside. Regards, Mark