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

To: Z Analyzer who wrote (8118)	3/18/2000 2:11:00 PM
From: Mark Madden	Read Replies (1) \| Respond to of 9256

Here is a weekend report on disk drive pricing from a sample of retail distributor drives. The drives include 333 samples from 6 different distributors. The average sample of disk drive prices remained stable last week. Weekly average price change Weighted desktop --- down 0.2% Less than 11gb --- down 0.2% 11gb to 21gb --- down 0.1% Greater than 21gb --- down 0.2% Enterprise --- up 0.3% Monthly average price change Weighted desktop --- down 1.0% Less than 11gb --- down 0.5% 11gb to 21gb --- down 1.6% Greater than 21gb --- down 1.0% Enterprise --- up 1.1% Quarterly price change (monthly rate) Weighted desktop --- down 1.6% Less than 11gb --- down 1.1% 11gb to 21gb --- down 1.5% Greater than 21gb --- down 2.5% Enterprise --- down 0.1% Last Quarterly price change (monthly rate) Weighted desktop --- down 1.5% Less than 11gb --- down 1.0% 11gb to 21gb --- down 1.3% Greater than 21gb --- down 2.4% Enterprise --- up 0.1% Maxtor announced higher than previously expected earnings for the quarter. Their profits will be about $3 per drive compared to about $0.60 per drive in the previous quarter. From the samples of drive pricing, Maxtor's average drive dropped about $7 this quarter so far. However, Maxtor stated the mixture of sales shifted toward the higher end 3 and 4 platter drives. The increased profits are a mixture of decreasing costs of manufacturing and higher margined sales. Prices seemed to solidify in the category above 21gb. Weekly price erosion has averaged 0.2% for the past three weeks whereas it averaged 0.7% the previous 7 weeks. This coincides with reported shortages at the retail distributors for the higher capacity drives (especially the 7200 rpm). Samples of desktop HDD drives dropped $11 so far this quarter. The higher price erosion may reduce desktop profits but higher pricing in the enterprise market may help offset reduced margins. Seagate desktop samples dropped an average of $4 so far this quarter. Their large exposure to the enterprise market complicates predicting their earnings. If the increase in enterprise prices was because of increased demand then Seagate will have a very good quarter. If the increase was because of manufacturing shortages created by Seagate?s manufacturing problems, Seagate will not do so well. Steve Luczo hinted that we would see big improvement in their enterprise unit in the June quarter. Western Digital held the most stable prices for the quarter so far. Their average sampled drive dropped $1. If they kept their unit sales up, Western Digital will surprise many this quarter. Regards, Mark