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

To: William T. Katz who wrote (1658)	11/29/1997 7:00:00 PM
From: LK2	Respond to of 9256

Bearish case for disk drive sector- >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Subject: Seagate Technology - SEG To: Jacky AY (4290 ) From: A.S.Ong Yiu Saturday, Nov 29 1997 2:22PM EST Reply # of 4291 The short-term outlook continues to be bearish for the industry... ....Analysts don't expect the inventory glut, particularly in desktop hard drives, to dry up for at least another quarter, or perhaps even into the second or third quarter of next year. This will keep prices in favor of the buyer. "Pricing right now is extremely aggressive - two times the normal double-digit price decline in drive capacities - and this is supposed to be the best quarter of the year," Tenney said. IBM looms as threat to hard drive leaders techweb.com Greg's summary of his conversation with Donald Waite, SEG CFO, provided a bleaker outlook.... 15) He likened the current situation to one that occured in '91. However he did say that there is more competition today than 6 years ago.... 1991 was the start of the last round of savage price wars that lasted several years and eventually saw Conner swallow about $400 million in losses in 1994 and Maxtor hawk disk drives on QVC, the TV shopping network, in a desperate attempt to gain market share points in 1995. Here's a brief excerpt from a bio on Shugart that describes that period.... ....Shugart also took direct control of Seagate's operations when the board ousted Mitchell in 1991. Shugart became president, as well as chairman and chief executive, and began shaking things up. He also pushed vertical integration. Seagate's vertical integration, allowing it to capture more margin, and its stronghold in the higher end of the market, enabled the company to weather the industry's bloody market-share battles over the next three years... Pioneer Of The Disk-Drive Frontier -- Alan Shugart techweb.com As always, there's a mad scramble underway to increase the pace of innovation to protect margins and capture market share. One can see IBM and Toshiba (in collaboration with TDK and Yamaha) accelerate the move to Giant MR. One can see RDRT redouble its effort to achieve its goal of growing density at 60-80% CAGR instead of the industry norm of 60% CAGR. One can see IBM and SEG bring 7200 rpm to the desktop to try to dominate the 4 GB and above segment of the desktop, etc, etc.... This could get really bloody. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< P.S. How can you automatically capture/record the post number, now that SI uses a different software to record the post number? This would make it easier for a reader to check the actual post (without my bothering to manually record the post number).

To: William T. Katz who wrote (1658)	11/30/1997 10:51:00 PM
From: Sheba	Respond to of 9256

I couldn't find much info on the Quantum or TeraStor website. All that is stated is: 1) The NFR drive could hold 20 gigs per surface. 2) The price will be $500-600. 3) Quantum plans on using NFR heads on their DLT drives. The price is quite competitive with the DVD-RAM drive from Hitachi, about $850. No prices on media.

To: William T. Katz who wrote (1658)	12/1/1997 9:13:00 AM
From: Chuck Bleakney	Read Replies (1) \| Respond to of 9256

>> So if you can make a disk that cheap using MR, why can't you make a disk at least that cheap using NFR? << You should be able to make a comparable product, but the price will be higher for a couple of reasons. First, NFR uses magneto-optical recording. This essentially should use a head similar to MR plus a laser with all of the associated optics. This adds more cost to the system. The relative efficiency of this is about a 10:1 recording ratio over the Orb drive. So even if the drive does cost about $600, the media cost comparable to Orb would be about $300... I don't expect it to cost this much, but it could cost as much as $100 and still be a very competitive. Of course the cheaper, the better. A $100 price tag for media would probably turn the general pc public off, so it depends upon the focus for the market segment(s) the company wants to capture. Obviously, the cheaper the price for media, the deeper the market penetration... But with a new product offering and the ramp up and other new product problems they might not be trying to invade the pc space right out of the chute. A phased product offering probably makes more sense and this would tend to point to a higher price for media initially... with decreases in price following the increases in availability of supporting products and follow-on media. Chuck