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

To: Gottfried who wrote (3864)	6/28/1998 9:11:00 PM
From: Pierre-X	Respond to of 9256

Your comment about cost structure management is very interesting, and sparked a few thoughts upstairs. Enlightened DD maker management will use the benefits of TSA to cut costs and will then shut down and sell some of their plants (instead of increasing production for another glut). The HDD final assembly sector is as competitive a business as you will ever see. End users have benefited tremendously from nonstop leaps in density and performance. Per MB prices have consistently fallen by orders of magitude for going on two decades. Self-destructive supply-side conflicts as seen recently also benefit end-users -- essentially an income redistribution from HDD investors to HDD consumers. <g> Who says free markets don't create welfare? <g> This is war. War without violence perhaps, but the casualties are there. And like most wars, the front line soldiers live and die by the strategems of their commanders; largely ignorant of the forces at work. A certain type of left-leaning economics view might hold this type of war and its resultant casualties a market failure. The HDD solution to the prisoner's dilemma: rat, rat, rat ... and all prisoners are executed. In diametric opposition Microsoft has no noticeably competition in their market niche -- personal computers. This hasn't always been the case; Apple held the early lead at the inception of the industry and continued as a powerful force throughout the 80s. With the advent of the Mac Apple arguably also held a technology advantage, but through a series of strategic errors arrive at their current position of huge irrelevance. Today one could conceivably say Microsoft is a redistribution of income from end-users to investors. <g> Here also we have a large, vocal peanut gallery with cries of market failure. So we observe the direction of redistribution is significantly determined by the competitive landscape, at least for these two cases. I'm certain this would not even be much of an issue were it not for the fact that, in the case of Microsoft, one man represents 24% of the "investors" side of the fence, and that seat has now equated itself with the numero uno spot in the wealth world, attracting all sorts of attention. Just a few random thoughts.