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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: Sarmad Y. Hermiz who wrote (10676)	7/26/2003 12:00:46 AM
From: Gottfried	Read Replies (1) \| Respond to of 11057

Sarmad, I remember IBM sold heads to competitors in the past, but don't know how that went. Gottfried

To: Sarmad Y. Hermiz who wrote (10676)	7/26/2003 12:34:10 AM
From: Sam Citron	Respond to of 11057

I guess he was tired after he stayed up all night bidding and counter bidding. At last, a cogent and most reasonable explanation for the lapse. Let's see who recovers first: Matt or the stock price. Sam

To: Sarmad Y. Hermiz who wrote (10676)	7/26/2003 2:47:48 AM
From: Sam Citron	Read Replies (1) \| Respond to of 11057

Can they actually sell to Maxtor and Seagate, who currently buy nothing from RR? According to www.trendfocus.com/samples/HeadQU402.pdf , Seagate has the largest market share (59.2%) of the captive HGA segment. And they are obviously cozy with Alps or they would not have submitted a joint bid with them for RDRT assets. So it is somewhat doubtful to me that that STX would need WDC heads, especially since they have not relied on Readrite heads in the past. As for Maxtor, my impression is that they do not have any captive HGA supply, so may be more agnostic than STX, though would probably prefer to buy from noncompetitors SAE and Alps, unless WDC could blow them out of the water on price. This is all spec on my part based on same pdf source from 4Q02 as above: "Seagate Technology led the Captive sector with 59.2%, IBM followed with 28.8%; Hitachi took over the third position with 7.7%, and Fujitsu had 4.3%." Is it possible that WDC could become a serious OEM contender to supply HGAs to others? Note the chart on p. 3 showing RDRT's market share had slipped during '02 to under 10% while SAE's share expanded to around 60% and Alps' to 30%. Probably wont be easy, especially with conflicts in the channel. But Matt made it pretty clear that the strategic focus was primarily on satisfying WDC's own capacity needs. The 50% estimate seemed modest and perhaps was intended to soothe SAE and Alps. Why wouldn't he aim for 100% if RDRT has the capacity and can produce efficiently? Matt said he does not want to disrupt longstanding supply relationships, and I believe there is a strategic advantage in having that flexibility. Sam