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

To: jkb who wrote (6709)	12/13/1997 10:01:00 PM
From: Rational	Read Replies (1) \| Respond to of 9124

Jay: I think Maxtor began cutting prices and Fujitsu followed. SEG, WDC and QNTM had to follow then to clear their inventories. When Maxtor first began cutting the price, the whole concept of cost of capital did not exist. They simply set a price equal to labor plus material. As they begin to realize the tough financial situation, they will have to raise price to cover all costs so as to stay in business. They can do so since they know other competitors have no incentive to keep prices low. I am assuming that Maxtor management will have learned that to stay in business, they have to cover all costs so that they have enough hard currency to modernize plant and equipment and pay finance charges -- IMF is teaching them such business lessons!! I do not know prices will rise immediately, but they will soon. Sankar

To: jkb who wrote (6709)	12/15/1997 9:03:00 AM
From: Toko	Respond to of 9124

Jay, The way out of the pricing pressure in low end drives (you quoted 1-2GB) is to move your production mix up to higher capacity points. Quantum is now in masspro with: Fireball SE - 2.1GB/disk Big Foot TX- 4GB/disk (5.25"). The faster you move to higher capacity points, the less pain you endure where price erosion is the worst. That's what makes this such an interesting technology race. -TOKO

To: jkb who wrote (6709)	12/16/1997 11:18:00 AM
From: Alan Hume	Read Replies (1) \| Respond to of 9124

Hi Jay " does QNTM expect that pricing pressure in low-end disk drives (1-2 gb) will eventually be gone? If they (QNTM)are not making money at this market and neither is anyone else (WDC, SEG) - what and or when will these companies decide to raise prices?" Easy answer to this is that I don't suppose they care too much as they don't sell anything under 2,1Ghz !!! However having said that, rot starts at the bottom and works its way upwards. Price errosion in the 2-3GHz market is already noticable I believe Alan