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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: Torben Noerup Nielsen who wrote (2028)	5/4/1998 10:26:00 AM
From: Jim Switz	Respond to of 5944

Torben said: Adaptec supplies the chips for the motherboard too. They have done this for quite some time. It is nice since you don't loose (sic) a PCI slot that way. If I remember it correctly, one of the interesting comments from the conference call was a statement to the effect that box-builder OEM customers like Dell and Gateway are moving away from integrating SCSI on the motherboard, given their desire to be able to build everything to order and deliver to their customer exactly the configuration they desire. ADPT said there was a trend (how strong a trend?) back toward installing host adapter cards for customers who want a SCSI configuration. While this loses some sales of onboard SCSI chips, the sale price (and profit margin) of host adapter boards is much greater. So, for example, if you lose 10 chip sales, but move 2 adapter boards and (for example) the profit on each board is 8x each chip, ADPT is making more money overall. It would be interesting to have more insight on the real numbers here. Instead of trying to read the stock's lowest-price tea leaves, I'd like to see a discussion started here to psych-out Adaptec's overall strategy, given their acquistions and stated company reorganization. Aside from simple views such as being the "bandwidth provider", what is ADPT's big scenario for the future? How, exactly, do all the technologies fit together? Are they creating a new powerhouse for OEMs to adopt, with a high barrier to entry for the competition? Jim