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Technology Stocks : Hutchinson Technology, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Z Analyzer who wrote (1456)	1/26/2000 12:53:00 PM
From: Mark Oliver	Respond to of 1487

I have not followed this sector as much lately because it just hasn't had enough shine to take my crow like attention, but I'd say that the basic problem seems to be that Hutch has competition and their products are not good enough to make them the hands down winner. We had a view last year that TSA could be a clear technical advantage to make it the premium choice for all advanced drives. Today, we see they can't hold their ASP's because of encroaching competition, and they have only 40% market share. It's just not good enough. So, they go from predictions of positive earnings to negative. Unit sales for drives have improved. Suspension sales per drive have fallen. Result, selling fewer suspensions. Hope, high end TSA take over sales from low end, but competition is eating market share from TSA as this happens and ASP's drop leaving again a profitless forecast. How can this change? - Change the TSA to a higher margin product? - Take market share, but how (price or quality)? - Competition caves and gives Hutch the market? - Merge with a competitor? - Develop an Internet initiative? Doesn't look too bright, but then at $16 the market has priced this company for failure. Most interesting thing is to see them writing off TSA production equipment. They clearly got their unit numbers by brute force last year. Now, they seem to be better off with their processes. Too bad unit demand hasn't grown as expected, but even if it did, maybe they learned some of their techniques were just no good, so they junk useless equipment. Anyway, gets back to why one should invest in profitless companies struggling against terrible market conditions, verses companies with better opportunities? I guess my crow like attention will fly off again in search of something shiny. Regards, Mark PS Does Marconi get a prize for his short timing and does he cover at this point or call for deeper declines?