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

To: Alan Hume who wrote (5813)	11/30/1997 12:38:00 PM
From: Rational	Respond to of 9124

Hi Alan: You say: "You are quite correct that vertical integration is the way to go." I did not say this. IMO, VI is a wrong way to go because the company loses the flexibility as the divisions making components become complacent and do not generally produce the best parts at the lowest cost. Many prominent companies (e.g., GM, IBM, ATT) have transformed their component producing subsidiaries to compete in price and quality and not depend on orders from the parent company or have spun off these subsidiaries entirely. QNTM is nimble and efficient as it can negotiate for parts at the least possible cost. If producing such components, per se, is profitable QNTM has the flexibility to start a new subsidiary. You say: "It is misleading to compare the $ per head ratio of a vertically integrated company with non VI company." There is nothing misleading in using facts to illustrate that a VI SEG is inherently inefficient as compared to QNTM. I welcome facts to the contrary. Sankar