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

To: Gus who wrote (8270)	4/18/2000 3:04:00 PM
From: Yogi - Paul	Read Replies (2) \| Respond to of 9256

Gus, Just a note of appreciation for your posts. Valuable. Thanks, Paul

To: Gus who wrote (8270)	4/18/2000 10:36:00 PM
From: Mark Madden	Respond to of 9256

Gus - <Keep in mind that retail accounts for only 10% of total sales. The real wild-swinging price action tends to happen at the major OEM accounts typically during near the end of quarters> Thanks for qualifying the data used for the weekend pricing reports. The data needs to be qualified periodically to show how sketchy these reports can be. Over 65% of disk drive sales are to OEM's (Original Equipment Suppliers). Only about a third of the remaining sales are in the US. There are over 1000 drive suppliers in this country. The pricing reports are taken from 6 of these suppliers. The data samples do not include all the drives provided by these suppliers. The data from the 6 suppliers does not usually run in tandem. There are many reasons why a supplier may change prices but one of them may be because the drive manufacturer wishes to increase market share and changes the price to the supplier. The pricing pressure is not even on each drive. The averages in the report often include several drives increasing in price and several drives reducing in price. The results of the average pricing have been close to the pricing quotes in conference calls but there is no doubt some luck involved. Most recently analysts conflicted with the pricing reports. One report said pricing in the enterprise market pricing was tough. The weekly pricing reports indicated the average enterprise drive actually increased in price over the quarter. Recent reports by SEG and EMC indicate pricing was good. The pricing reports use a term called the weighted average price. This is pricing based on the percentage of drives sold in capacity ranges as estimated by Disk Trend last April. I am not sure Disk Trend will update the report this year so the estimated percentages are becoming increasingly fuzzy. I expect the pricing reports to give us early warning of price collapsing like last year but the warning will not be very far in advance to other warnings by manufacturers or analysts. It will only be a guide to help protect us against false rumors. Please use the reports with discretion. Regards, Mark