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

To: Troy Shaw who wrote (4597)	11/2/1997 2:20:00 AM
From: Dale Stempson	Respond to of 7685

Re: Margins, SyJet and R&D Troy, You bring up some interesting points: Gross Margins - While I agree that it appears Syquest is currently selling their drives near cost, I wouldn't be overly concerned. Syquest must price their drives competitively to draw interest. If unit sales volume grow, manufacturing efficiencies would improve, and then margins will increase. Of course that's a big IF. The lack of significant unit sales volume increases (as evidenced by the weak revenue report for last quarter) should serve as a red flag to those who follow this company. SyJet Pricing - As you pointed out, the recent price reduction is likely due to the anticipated higher capacity SyJet. I would guess that the current drive will quickly be obsoleted, assuming that 1.5 GB disks will work with the new drive. In addition, when and if the SparQ is introduced, there would be little need for a 1.5 GB SyJet. R&D Spending - I too am amazed at the drop in R&D spending. $26 million in 1996, $18 million in 1997, and now down to $2.6 million last quarter. It would appear that the EdHeads are going for broke with their new products and are spending every penny possible on marketing. Regards - Dale