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

To: Pierre-X who wrote (3359)	5/19/1998 2:47:00 PM
From: Sam	Read Replies (2) \| Respond to of 9256

Pierre, "My understanding of the history of this business (admittedly imperfect) is that the HDD industry has a STRONG tendency toward overproduction which drives it into imminent disaster (and indeed some companies flame out each time), which is averted at the last minute by the emergence of a new, massive storage demand driver that creates a market for all those extra drives and then some. This cycle has occurred about three times in the history of the business." Only partly true. Historically, there were a lot more suppliers in the business. They would all be building and vying for market share, and when ASPs tanked, some would go out of business, leaving that market share for others. There are, as far as I can see at least, now only 6 vendors vying for major market share. One of them--IBM--may be trying to help solve the problem by selling higher margin components rather than continuing to glut the merchant market with drives. Two of them--Maxtor and Fujitsu--may be affected by the financial dilemmas of their parent companies, Korea and Japan, oops, I mean Hyundai and Fujitsu. At the very least, their parents should be aiming at making money right now, rather tn gaining market share at any cost. The monkeys point, though, is well taken. But it is one thing to enter this business; it takes a lot of good execution, capital and planning to remain in it through all its changes. And perhaps a little luck. When Conner started 12 or 13 years ago, he came in at a great time--the 2.5 inch drive was just beginning, and he hit first and hard. He also had a growing Compaq as a primary customer right down the street. SEG completely blew it. Whether this is as auspicious a point or not, time will tell. Personally, I doubt it. But he has something to prove, and not much to lose. I'm sure he won't be hiring Tom Mitchell any time soon, not in this lifetime, anyway. P.S. Gillian Munson is a "she".

To: Pierre-X who wrote (3359)	5/19/1998 2:50:00 PM
From: Mark Oliver	Read Replies (2) \| Respond to of 9256

What can feed demand for drives? I would like to know if there is any report on the typical drive currently in place in enterprise systems. While a drive may have a mean time before failure of 114 years, at some point it would not make sense to have 9 one gig drives when it could be replaced with 1 nine gig drive. It would be interesting to know if there is a study which would indicate the need for replacing older drives. It would seem with constant demand to add new capacity, managers would be reluctant to shed older drives as the issues of seek time have not advanced as quickly as areal density. But at some point, the room is just not big enough anymore. Regards, Mark