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

To: Tom Simpson who wrote (8702)	9/16/2000 12:56:20 PM
From: Mark Madden	Read Replies (1) \| Respond to of 9256

Tom – You are sharp to observe the small capacity erosion in Q2. Looking over the data the small capacity (mostly 10gb) drive prices took a big hit late in the quarter. If I remember correctly this is about the time SEG was finally shipping 10gb platters. Possibly there could have been over-capacity or just plain dumping to make room for the coming 15gb platters. The manufacturers had all kinds of excuses. With the 20gb/platter drives the 10gb drive will be the lowest cost drive made. Yet the cost of making a 20gb drive is mostly the cost of a second head. If the prices of drives reflect the cost of making them the price of 10gb drives will be close to the price of a 20gb drive and most purchasers would buy the 20gb. The sales of the low capacity drives could really drop off and the price erosion becomes unimportant. Could it work this way? <at some point the categories will need to change to 15gb, 15-30gb, and >30gb....or something like that.> I am postponing as long as possible. <g> I am posting a figure called weighted average that uses obsolete data from a 1 ½ year old disk trend report. According to that report, only 7% of the drives sold today would be 10gb or less. 50% would be 11gb to 21gb and 43% greater than 21gb. Although the figures seem high I am using them because I lack anything better. It is apparent the 10gb and less category is fading away. I hate to change the categories much for comparative reasons but perhaps next year I can break the largest capacity into two categories and drop the smallest category. This might be something like <20gb, 20gb-50gb, >50gb. I will still need a method to determine what category the sales are in or the data becomes kind of useless. Regards, Mark