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Technology Stocks : Son of SAN - Storage Networking Technologies -- Ignore unavailable to you. Want to Upgrade?

To: trendmastr who wrote (4532)	4/17/2002 8:40:25 AM
From: trendmastr	Read Replies (1) \| Respond to of 4808

here's the long rumored csco announcement: QLGC QLogic technology to be integrated with Cisco storage products (49.93) Enters technology alliance with Cisco Systems (CSCO), which will include agreements to integrate QLogic technology and components into Cisco systems storage networking products, marketing of solutions, and joint interoperability testing.

To: trendmastr who wrote (4532)	4/17/2002 12:01:14 PM
From: Gus	Read Replies (1) \| Respond to of 4808

As I expected, the $3B a year disk drive division was not able to survive the early years of the Palmisano administration at Big Blue. This division had 25% of the 2000 enterprise disk drive market but I think it lost serious market share to Fujitsu and Seagate last year when this division was plagued by persistent yield problems and class action lawsuits. I do think it managed to retain its 45% share of the mobile disk drive market, but it may have lost market share in the high-volume desktop disk drive market segment and components from the way it lost more than $200M on a 35% sales decline in the most recent quarter. Hitachi only has 3% of the disk drive market or around $800M a year so the combination only creates a $3.8B company that is bound to lose market share during the integration phase much like the Maxtor-Quantum merger. The biggest winners here are Seagate and Fujitsu which will probably continue to gain market share at the expense of IBM-Hitachi and Maxtor-Quantum. The interesting angle to watch is the impact on the RAID systems business. Any problems during the integration phase will also force the RAID divisions of IBM and Hitachi to buy disk drives from Seagate, which may already have more than 50% of the enterprise market, and Fujitsu, which may already have more than 20%. The enterprise drive business is a low volume/high margin business compared to the high-volume/low margin desktop drive business so when you have major RAID vendors with aggressive pricing strategies such as IBM and Hitachi/HDS lined up and willing to pay spot prices for enterprise drives that is bound to moderate the pricing strategies of the major players and restrict the access to certain drives by most minor players.