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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: Pierre-X who wrote (7967)	12/3/1997 1:42:00 PM
From: Think4Yourself	Respond to of 11057

re: Prices wont stabilize until supply either supply falls to demand or demand catches up with supply. Based on my (limited knowledge), I would expect supply to start to fall in a few months. This won't be caused by market conditions so much as by technology itself. It appears that MR technology is now price competitive with TFI technology. MR has much higher potential storage capacity, and TFI is near it's practical limits at about 1.5 GB. From what I can see at the stores, the market demand is for, at the lowest end, about 1.2 GB disks, and is moving up in capacity daily. If I were a TFI technology manufacturer, I would be dropping a load in my pants right about now. My technology is about to become obsolete, and in about 6 months my drives will be virtually worthless. What do I do? 1. Sell off my inventories as FAST as I can (this applies to distributers and retailers as well. 2. Get raw materials and WIP out the door as fast as possible to avoid getting stuck with it. 3. Try to ramp up on some other technology, as quickly as possible, and at ANY cost. 4. PRAY I don't go the way of the buggy whip makers. This logic would apply to the entire supply chain. As a result supply will probably outstrip demand in the short term for the low end < 2GB of the market. As MR technology continues to come down in cost and as the technology continue to improve the TFI makers will simply be removed from the market. Why would anyone buy a really cheap 1.6 GB drive when, for a little more, they can get a 8GB drive? At the high end I see an incredible market. All of those people buying at the low end will need/want to upgrade in a few years. The entire market should turnover in the next 4-5 years as new applications, such as multimedia, increase the need for disk storage. It is already more cost effective for most people/companies to simply go out and buy a new drive to solve storage problems, rather than try to "clean up" a disk (possibly destroying critical files). Constructive arguments appreciated! Ken