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

To: Kurthend who wrote (3075)	4/27/1998 12:30:00 AM
From: Stitch	Read Replies (2) \| Respond to of 9256

Kurt, << I may disagree with your statement concerning --Long term demand will continue to decline>> I agree with the notion that long term demand for data storage (and disk drives) will continue to grow. The statement you reference above deserves careful definition. What was being specifically referred to was statements by Trend Focus, a DD market prognosticator. They were pointing out that average platters and heads per drive were falling. They said this is driven by higher areal density and the proliferation of lower cost (lower capacity) drives for the cheap PC market. This all came from a report done in March. Now, further on the topic, I believe that by "long term" they mean within the effective window of forecasting, which is presumably 4 years since their reports show forecasted data out four years in advance. Further on growth, Morgan-Stanley put up an interesting slide during a presentation in March in Singapore concerning DD unit growth. They reported that average unit growth (CAGR) for the period 1998-2000 was 16%. From previous forecasts they showed CAGR for the period 1995-2000 at 18%. For the period 1990-1995 they showed unit CAGR at 28%. Going still further back they showed the period 1985-1990 CAGR at 24%. The title of their slide was "Is There Growth?". Their point was that real unit growth has lulled the industry into believing that there is no end in sight of the demand curve. Yet clearly, the industry as a whole has considerably overshot the demand curve and is now paying the penalty. There has been much talk on these threads about slowing demand versus simple oversupply. I believe there has been a convergence of both though one could semantically argue they are not independent of each other. I do not believe that it has to spell doom for the DD industry. I do believe that DD companies need to redefine their charter. For example "Data Storage Management" as opposed to "Disk Drive Company". (This is a similar lesson learned by the movie industry when they lost the curve to television in the 50s. They simply defined themselves as movie makers instead of being in the entertainment industry. As a result they saw revenues -derived solely from ticket sales - dwindle while everyone stayed home to watch the Ed Sullivan Show and Sid Caeser). Its one of the reasons I favor Seagate in a recovery. IMO they have gone further towards that definition then the competition with the exception of Fujitsu and IBM. I am delighted to see Hyundai exit the PC business. I think it will make it harder for them to survive in the long term. Western-Digital needs a partner or a takeover. We may even hear something about that today if the "whispers" are correct. Watch their announcements today (Monday) closely. Best, Stitch