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

To: Gus who wrote (1988)	1/2/1998 1:57:00 PM
From: Pierre-X	Read Replies (2) \| Respond to of 9256

Re: OS Upgrade You said: it remains to be seen if the two OS rollouts later this year -- Win98 in the June quarter and NT 5.0 in late 98 -- will be compelling enough to stimulate a major upgrade cycle. I have two comments about this. First, I recall reading an article that dismissed the significance of Win98, alleging that Win98 offered nothing compelling versus a well equipped Win95 desktop. I tend to agree with this. What does Win98 offer? The most hyped feature of Win98 is the integrated internet and windows desktop resources. Personally, I find that "feature" an impediment rather than an attraction, given that I expect MS, as usual, to fumble the implementation of the interface. Modem clustering sounds nice, but there are hardware devices already offering that functionality from Diamond and Boca. From everything that I've heard regarding Win98, it will be a big non-event, in terms of functionality. The other thing I want to mention is that I've seen estimates of 60% of corporate desktops still using 16-bit Windows (3.1 and 3.11). It's possible that Win98 or NT5 could spark an upgrade wave in that 16-bit installed base, as those firms move to harness the various advantages of 32-bit. Complete discussion of such advantages has taken place elsewhere; I will just mention ease of custom development (with tools like VB5) and a plethora of new, 32-bit applications. Between these competing forces, the net effect of Win98 is uncertain. Clearly any new OS release boosts PC resource demand including our beloved HDDs, but will it be enough to get us out of our state of overcapacity? My guess is: NO. PX P.S. I observe that Maxtor has cleverly scheduled major capacity (at their new Dalian, China fab, under construction) to come on line just in time for Win98 and NT5. Smart guys.

To: Gus who wrote (1988)	1/2/1998 2:36:00 PM
From: Stitch	Read Replies (3) \| Respond to of 9256

Hi Gus, Thanks for the great (as usual) post. You said: <I'd be interested in hearing your thoughts about where consolidation is most likely to take place.> Thats a BIG question and is probably being asked in a few boardrooms as well as among investors. One item on the thread recently noted that some 15 or 16 players were all vying for the 20% of the market that the big four don't have. Let me try and answer this way. I don't see one of the big players leaving or being bought. Certain players today are a no brainer to me. I dont expect to see JTS survive the year for example. And I don't see viability in STMD's plan. In general I expect to see some consolidation moves from the media sector this year. In addition to STMD there is a Taiwanese Co. called Trace Magnetics that I don't think is very healthy. In heads you just got to look at who you think is the weakest, and I guess that is APM. But I don't think we will see that happen this year. I have called out some specifics but in general I expect to see consolidation in all three main sectors. With ref. to KR Precision, I do not know of any difficulty they face that others in the same business also face right now. I wouldnt be surprised if they had encountered backlog mushiness. What have you heard? Best, Stitch