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Strategies & Market Trends : APMP (formerly APM) -- Ignore unavailable to you. Want to Upgrade?

To: john p. carney who wrote (8322)	11/8/1997 5:16:00 PM
From: marc chatman	Respond to of 13456

RE DD's from Motley Fool (for whatever their view is worth): With average selling prices at Western Digital around $173 last quarter, a double-digit decrease puts a lot of moolah into the pockets of the PC manufacturers pretty quickly. If prices go down 15%, the average PC manufacturer could capture as much as $25 extra dollars a PC. While not a staggering amount, it would be an extra point in operating margins. Although COMPAQ (NYSE:CPQ - news) and DELL (Nasdaq:DELL - news) have been slashing prices 15% to 25%, the poor companies just cannot cut prices fast enough to keep up with falling component prices. Component vendors to the drive industry will probably also see pricing begin to fall as a result of similar pressures, although they will probably not be able to capture this benefit into next quarter. KOMAG (Nasdaq:KMAG - news) and HMT TECHNOLOGY (Nasdaq:HMTT - news) have way too much capacity on the thin-film media side, while the continued ramp-up of MR heads will allow READ-RITE (Nasdaq:RDRT - news) and APPLIED MAGNETICS (NYSE:APM - news) to bring down prices.