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

To: Stitch who wrote (8787)	9/30/2000 2:03:37 PM
From: Mark Madden	Respond to of 9256

Here is a weekend report on disk drive pricing from a sample of retail distributor drives. The drives include 315 samples from 5 different distributors. The average sample of desktop disk drive prices rose slightly last week. Weekly average price change (weekly rate): Weighted desktop --- up 0.2% Less than 11gb --- up 0.5% 11gb to 21gb --- up 0.4% Greater than 21gb --- even 0.0% Enterprise --- up 0.3% Current Monthly price change (monthly rate): Weighted desktop --- down 1.0% Less than 11gb --- up 0.5% 11gb to 21gb --- even 0.0% Greater than 21gb --- down 2.3% Enterprise --- down 1.3 3rd Quarter price change (monthly rate): Weighted desktop --- down 1.9 Less than 11gb --- down 1.3 11gb to 21gb --- down 1.7 Greater than 21gb --- down 2.3 Enterprise --- down 2.9 2nd Calendar Quarter price change (monthly rate): Weighted desktop --- down 3.0% Less than 11gb --- down 3.7% 11gb to 21gb --- down 2.8% Greater than 21gb --- down 2.6% Enterprise --- down 1.7% 1st Calendar Quarter price change (monthly rate): Weighted desktop --- down 1.5% Less than 11gb --- down 1.1% 11gb to 21gb --- down 1.3% Greater than 21gb --- down 2.2% Enterprise --- up 0.1% The quarter ended with a healthy price change rate thanks to stable or raising prices at the end of the quarter. However, earnings are made through the whole quarter and not are less impacted by good things at the end of the quarter than they would be by good things at the beginning of the quarter. There are still other factors that determine the amount of profitability we will see in the third calendar quarter. Costs are a big factor in profitability. Again, higher density platters should reduce costs by reducing the quantity of components in drives of a given capacity. The sooner manufacturers converted to 20gb platters the sooner their costs could reduce and create greater profits for the quarter. Other efficiencies throughout the quarter could also reduce costs and increase profits but these changes were likely more gradual. Quantities are also big factors in profitability. Greater unit volume spreads fixed costs to more units and reduces average costs. Lower costs increase the difference between cost and selling price that in turn increases profitability. The reported component shortages or slow PC growth could impact the unit growth that normally grows about 15% per year. Mix is another big factor in profitability and it is one of the most difficult factors to determine. It is the reason the average selling price changes at a different rate than the average price change in the pricing reports. The pricing reports measure the price change of given drives but the average selling price increases as consumers buy higher capacity and higher priced drives. The higher priced drives are generally higher margined also. The mix has generally been positive for desktop drives this year and should increase more as broadband communications and multimedia content becomes readily available. There will be greater need for higher capacity drives. Regards, Mark

To: Stitch who wrote (8787)	10/1/2000 4:05:53 PM
From: La Traguhs	Read Replies (1) \| Respond to of 9256

I took an early weekend, but just as I was leaving Friday, I confirmed another rumor that has been brewing for the past few weeks and that it is Conner Tecnology is no more. Finis is off stealing Read-Rite optical folks with the intention of also doing something in the fiber optic component area. Must be nice to have petty cash like that laying around for these new ventures that come and go. Every one in San Jose and Colorado have been given at least one weeks notice. The follow on rumor is that Great Wall wants to continue designing and building disk drives primarily for internal consumption. On the Maxtor/Quantum deal, I understand it will be a "fair transaction." and for sometime to come the MKE and Maxtor manufacturing will remain until a better arrangement is found. Remembering what happened with the earthquake in Taiwan and the flooding in Nagoya, it wouldn't be a half bad idea to keep two separate manufacturing facilities. Samsung swears up and down they intend to remain in the disk drive business. I and many others figured they would have thrown in the towel a year ago. But they are getting very, very slim on technical depth in their San Jose design center. They just lost their VP of Engineering, Logan Saverimuthu. Regards, LT