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

To: Doug who wrote (2056)	5/5/1998 10:43:00 PM
From: Torben Noerup Nielsen	Read Replies (2) \| Respond to of 5944

Doug, I'm not sure of all of it and I'm certainly no market expert, but for what it is worth, here goes..... a: UDMA 33/66 has short circuited SCSI in the PC market and is now also taking market share in Wk-Stns\|Servers. I think the first part is true. For the low to mid PC market, UDMA has it pretty much sown up for the time being and if that ever changes, it likely will not be to any form of SCSI. However, it could go to 1394..... For the high end, I think we are still dealing with SCSI since you often need a fair number of devices and you also need higher throughput with lower CPU consumption. Note that UDMA does take a fair amount of your CPU capacity. That isn't a problem on your desktop - a single tasking system is often fine - but it is a serious problem in a high end workstation or a server where lots of processes need to share the CPU and also carry out a lot of I/O at the same time. b: Margins are being severely squeezed to maintain revenue. Yup. That always happens in a mature market. But Ultra2SCSI is still a different story. Nothing to be done about that except move on to a different market. Any technology company that doesn't move dies. c: Qlogic is gaining market share from ADPT. I can't really speak to that since I haven't seen hard numbers. But take a look at the lineup of products that Qlogic has. How do they look if you want a company with broad range of bandwidth solutions? How do they look when it comes to software? Note that a reasonable amount of Adaptec's revenues came from software. I think you need to look at the company's entire line of products and I do not think that Qlogic has the broad lineup they would need to match Adaptec. d: The recent acquisition may prove a write off. That could be the case. But if so, why would the Adaptec management team go for it? Did they all take leave of their senses at the same time? Also, why is Symbios apparently hiring a lot of engineers recently (as stated in messages here)? At a distance, Symbios appears healthy and it should transplant well. Morale at Symbios may go up too since they will go from an arms length subsidiary to being part of a real company. Yes, there is a difference. Sorry, but that is all I can really think of. Please feel free to knock holes in my reasoning. Cheers, Torben