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

To: CPAMarty who wrote (8962)	1/12/2001 10:20:43 AM
From: Yogi - Paul	Read Replies (1) \| Respond to of 9256

Marty, <<Perhaps any slow down in unit growth for hard drives will be more than offset by a better pricing environment after the HDD/MXTR merger. >> <<It is possible that new trends will emerge that will lessen the impact of the PC slow down, i.e. hard drives in televisions, etc. >> While price wars may be over, there is still no pricing power for the hdd sector. Consumer applications require a low price point to generate substantial volume demand and the hard drive is the major cost associated with a PVR or set top box with pvr capability. PC market penetration exploded because of sub $500 pc systems (with the dubious but consumer friendly rebate packages) and that price point was largely on the back of the hard drive sector. PVR demand won't explode until they are priced in the sub $200 range. Alternatively, pvr enabled set top boxes could be rolled out by cable operators to capture potential revenue streams but the cable operators (until 2005... Telecommunications Act) may not have access to enough capital to roll these out in impressive numbers. Companies like Maxtor are dependent on high margin NAS and enterprise to prosper. Absent exciting guidance from Maxtor about MaxAttach and some earnings visibility for the full fiscal year (and even HWP couldn't do that) it remains a trading stock (buy below $6.00 sell at $10.00). WDC is doomed if the X-box is delayed (and I think it will be). Of course I've always been harsh on WDC and that might blind me a bit. All opinions of an outsider looking in and I must admit Readrite surprised the crap out of me and I'm quite surprised by the strength of Dell, MXTR, et al recently. I can't find any reason for optimism in the pc sector but would love to listen to ideas. Paul