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Technology Stocks : SYQUEST -- Ignore unavailable to you. Want to Upgrade?

To: Dale Stempson who wrote (4596)	10/31/1997 7:20:00 PM
From: Troy Shaw	Read Replies (1) \| Respond to of 7685

Dale, There are a few things that I find to be rather fascinating about SyQuest right now. #1) SyQuest has negligible gross margins, which means to me that they are selling their drives (including SyJet at a loss.) I base this on the fact that the cartridges have very good gross margins, yet overall gross margins are negligible. #2) SyQuest recently dropped the price of the external SyJet from $399 to $299 to match the price of the internal. Given #1, what does that say about SyJet? Is SyQuest trying to blow out current SyJet inventory in anticipation of a new drive? #3) SyQuest is rumored to have 3 distinct new products coming soon, SyJet 2.5, SparQ, and Rocket. Given that R&D budget for SyQuest is drastically down, 5.4M in 1996 Q4 to 2.5M in 1997 Q4, how is SyQuest developing so many new products? Compare that to Iomega's R&D budget which was 23M for the quarter ending Sept. 30.