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

To: Z Analyzer who wrote (8507)	7/27/2000 11:39:20 AM
From: Mark Madden	Respond to of 9256

Z - Good questions! Here are my opinions. First - The reported demand problem was component shortages at the PC manufacturers. This impacts the OEM drives sales directly. The retail sales (about a third) would have a delayed impact. The pricing numbers may have been there but they were hard to recognize. The largest weekly price drop this year was the June 21st report at 2.5% weighted average. The first six weeks of the quarter averaged a 0.5% weekly drop. The last six weeks of the quarter averaged a 1.1% weekly drop. Second - According to my notes SEG mentioned weaker desktop demand at the second half of the quarter in their conference call. At least they said demand remained strong in the enterprise sector. I think SEG is attempting to blur the line between desktop and enterprise so people will not see what a gold mine the enterprise business is. It is high margined and fast growing but it does not look so glamorous when mixed in with the desktop business. Third - A 100% increase in annual aerial density may translate into an 80% annual savings in cost at a given capacity. This may allow increasing profits when the annual price of drives drops 50% annually. I think this is how drive makers have gone from huge losses last year to small gains this year. Think how well they would do if prices held steady. Maybe others have opinions to add. Regards, Mark