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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: GVTucker who wrote (12863)	7/11/2001 2:00:37 AM
From: Gus	Respond to of 17183

You forgot to consider that one of the major reasons for the rapid decline in hardware revenue is the brutal pricing environment. Hardware prices declined by 35% in 1Q2001 compared to 30% for the entire year of 2000. Nothing indicates that pricing environment changed in 2Q2001 or that it is improving in 3Q2001 so EMC may still be selling the same number of systems and may in fact be selling more systems, but raking in less revenue. Remember that inventory is valued using the FIFO cost method so inventory doesn't necessarily have to decline as fast as hardware revenue if EMC is determined, as they appear to be, to capture more market share.

To: GVTucker who wrote (12863)	7/11/2001 4:10:09 AM
From: Jacob Snyder	Read Replies (2) \| Respond to of 17183

July 11, 2001 Sun Microsystems Is in Talks To Resell Hitachi Computers By JERRY GUIDERA Staff Reporter of THE WALL STREET JOURNAL Sun Microsystems Inc., angling to shore up its arsenal of storage products to battle industry leader EMC Corp., is in advanced talks to resell high-end information-storing computers made by Hitachi Data Systems Inc., according to people close to the matter. For Sun, the move would be a concession of sorts that its year-and-a-half-old effort to sell its own "big box" storage systems to compete with EMC's dominant Symmetrix line of devices has fallen short of expectations. Sun, which is the leading maker of so-called server computers, has been seeking to expand its portfolio in the faster-growing data-storage market. HDS, a unit of Japan's Hitachi Ltd., last year dropped its server-computer business to focus only on storage systems. It has managed to gain significant market share by underpricing rivals. Mark Canepa, head of Sun's storage division, called the talks "rumors," but added, "Anything that creates partnerships between storage and server companies enhances the overall solution [for customers] and makes it tougher for storage-only companies" to do business. Jodi Reinman, an HDS spokeswoman, declined to comment on the negotiations. James Berlino, an analyst with Merrill Lynch, said a deal with HDS would be "a very good solution in the short term for Sun" after "failing to execute" on its other storage efforts. Added Thomas Mancino, an analyst with Pacific Growth Equities in San Francisco, "We believe that such a relationship will be announced shortly." Sun and HDS have held talks about potential cooperation for months. The talks picked up speed in May, according to the people close to the situation. The deal may still encounter hitches, these people added. Sun must first decide what to do with its existing T3 line of high-end storage products. It is also unclear if the deal will involve a so-called OEM pact, where HDS's boxes are sold under the Sun brand, or an arrangement under which Sun will resell HDS-branded products. Besides ratcheting up competition for storage leader EMC, Hopkinton, Mass., a deal might upset an existing arrangement between HDS and Hewlett-Packard Co., under which H-P also resells HDS high-end storage devices. Sun and H-P are archrivals. An H-P spokeswoman, Suzette Stephens, played down any impact to her firm's existing pact with HDS, calling the relationship with HDS "excellent." EMC President Joe Tucci said any Sun-HDS alliance "will be increased competition, but in another sense they're finally coming around more to our point of view on things," because it shows that Sun "needs" to sell storage.