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

To: Sam who wrote (9244)	3/8/2006 2:15:04 PM
From: Mark O. Halverson	Respond to of 9256

Sam, Thanks much for your views on the DD industry, insightful as always. Best, Mark

To: Sam who wrote (9244)	3/9/2006 4:56:40 PM
From: Carey Thompson	Respond to of 9256

There is a lot of stuff going on in the Disk Drive sectors (as always). The Seagate Maxtor merger was a recent big event, that event is apparently discounted by the DD analyst community. Just months ago, the DD analyst community was screaming price cutting was in check because there was 1 less DD supplier. In the same breath the DD analyst community was screaming OEMs would award more business to WDC because the OEMs did not want to become too dependent on a single supplier of DDs or the combined Seagate Maxtor. Within a year this reasoning and logic is kaput. I do not think so. The new competition is the flash memory. The new IPOD uses flash memory to store an enormous amount of songs. The IPOD is the transistor radio generation of kids, the sound does not have to be excellent just good enough to groove on through the headphones. Keep your eye here for its impact on the DD companies. Also, look at the foreign DD suppliers like Samsung, Fujitsu -- they may get it right. Prices of DDs are coming down, that is true, but the bytes stored per dollar have been falling for 25 years. Keep you eye on number of drives sold and inventory turnover. These 2 stats will bear out WDC is 1) selling a lot of drives, 2) is inventory is dynamic. When the inventory turnover begins to fall--then get worried. Before you get too carried away with the DD analyst community re-read the last quarterly statement. "LAKE FOREST, Calif. - Jan. 26, 2006 - Western Digital Corp. (NYSE: WDC) today reported revenue of $1.1 billion on shipments of approximately 18.1 million units, and net income of $104.3 million, or $.47 per share for its second fiscal quarter ended Dec. 30, 2005, including $4.2 million of expenses for stock options. Excluding stock option expenses, net income on a non-GAAP basis was $108.4 million, or $.49 per share. Gross margin for the December quarter was 20.4 percent. During the December quarter, the company also recorded a $7.0 million charge to expense related to the write-off of capitalized software, which is included in both the GAAP and non-GAAP results. These results represented strong year-over-year performance, including 12 percent unit growth, 17 percent growth in revenue versus $955 million in the year-ago period and 86 percent growth in net income over the $56.0 million reported last year. A year ago, the company reported earnings of $.26 per share in the fiscal second quarter, shipped 16.2 million units, and posted gross margin of 15.7 percent..." Here is the link. wdc.com{7E27241E-CD1A-4177-B82A-4A85C467440D}

To: Sam who wrote (9244)	6/7/2006 5:39:32 PM
From: Mark O. Halverson	Read Replies (1) \| Respond to of 9256

Below is todays WSJ article re STX. I am long WDC and STX and have been for some time. It seems to me that health of disk drive companies requires DD technology to stay competitive with flash, so that flash doesn't overly encroach into areas of present DD advantage (high capacity, low cost). It seems to me that DD technology is doing so, though I could certainly be wrong. Any thoughts? Best, Mark Drive Makers Cram More Data Capacity On New Disk Devices By DON CLARK June 7, 2006; Page D5 Disk-drive makers are introducing products that cram even more data onto the ubiquitous storage devices, as they compete with the "flash memory" technology that is becoming common in consumer electronics. Seagate Technology Inc., the largest maker of disk drives, today is unleashing 10 new products, including drives that combine -- and compete with -- chip-based alternatives to spinning disks. Companies also are talking up their progress in squeezing more bits of data onto each disk. Toshiba Corp. on Monday said it expects in August to begin shipping a drive that can store 178.8 gigabits of data a square inch -- a gigabit equals one billion bits -- compared with 133 gigabits for current products by Seagate and others. Hitachi Global Storage Technologies last year said it has achieved storage densities of 230 gigabits a square inch, though products based on that technology aren't expected until 2007. Shrink to fit: Seagate's tiny disk drive for cellphones. The latest achievements are made possible by a technology called perpendicular recording, which arranges bits vertically, rather than horizontally, to fit more on a disk. The technique has increased the rate of capacity improvements by drive makers, which face competition from flash-memory chip technology that is more shock-resistant than disk storage but also more expensive. Seagate has been particularly aggressive in offering products that compete with flash cartridges, which are used in cameras, cellphones and "thumb drives" that help users store and transfer personal-computer files. The company in July plans to begin selling a $149 pocket disk drive that stores eight gigabytes of data, up from a maximum of six gigabytes on current models. Seagate says the new capacity could allow a user to carry as much as 133 hours of digital music, 2,560 digital photos, eight hours of digital video or four PC games. WALL STREET JOURNAL VIDEO WSJ's Peter Grant interviews Seagate Technology CEO Bill Watkins about the new-product launch.The company also is announcing plans for a hybrid drive for laptop computers that combines 160 gigabytes of disk storage with 256 megabytes of flash memory, a feature designed to allow computers to wake up from their "sleep" mode about 20% faster than disk drives alone. When combined with Microsoft Corp.'s Vista operating system due out next year, such hybrid drives can allow a portable PC to boot up in 10 seconds or less -- a big time saver for portable PC users, said Bill Watkins, Seagate's chief executive officer. "Our sense is if you could get a 10-second boot time you would buy a new notebook," Mr. Watkins said. Seagate also is pushing the envelope at the high end, offering some of the first drives that can store 750 gigabytes of data -- up from a 500-gigabyte maximum capacity the company unveiled last September. That drive, designed for consumers to back up photos, music and other media files, carries a list price of $559.