Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : INVX Innovex Comdex Winner !! -- Ignore unavailable to you. Want to Upgrade?

To: hasbeen101 who wrote (2684)	9/21/1998 10:32:00 PM
From: Thomas Scharf	Read Replies (1) \| Respond to of 3029

There may soon be a new (old) player in the disk drive business. mercurycenter.com Conner back in fray Disk drives: Industry pioneer who co-founded Seagate now set to open new firm aimed at sub-$1,000 PCs. BY K. OANH HA Mercury News Staff Writer It's been three years since the disk drive industry has heard a peep from pioneer Finis Conner, but now he's back. At a time when other disk drive makers are barely surviving, the Silicon Valley icon plans to announce Wednesday at Diskcon USA in San Jose a new disk drive company aimed squarely at the market that has helped drive prices down and other manufacturers to the brink of despair: computers selling for under $1,000. ''The sub-$1,000 market is going to be the largest growth segment in the future,'' said Conner, chairman and chief executive of newly formed Conner Technology PLC. ''The bigger companies are going to have difficulty surviving in the market. They're carrying with them a lot of burden and overhead. They can't reorganize completely while we're starting from scratch.'' And no one should know better about starting from scratch than the 55-year-old Conner. This will be his third pass at the data storage industry in 20 years. Conner co-founded disk drive giant Seagate with Al Shugart in 1979, leaving the company after a falling-out with Shugart. He left to found Conner Peripherals Inc. in 1985, which grew to be the third-largest disk drive company in the country -- only to be acquired by Shugart's Seagate in 1996. Now he's competing with Seagate again. Conner Technology was incorporated in July in Ireland to take advantage of its corporate tax breaks and educated but low-cost workforce. While the company will be headquartered in San Jose, much of the support and distribution will be based in Ireland. Development of the disk drives, which store data in a computer, will take place in Colorado. And the manufacturing will be done on a contract basis in Asia. ''If I came to a market that's in as much trouble as the disk drive industry is today and do things the same way as everyone else, certainly someone can question our lunacy,'' said Conner. ''But we're doing things differently and still will give customers what they need.'' The $27 billion disk drive industry has suffered from a combined malaise of heightened competition, sluggish computer sales and overproduction in the last year. Profits have also slid due to the popularity of budget PCs. ''Computer makers are scrambling around talking to disk drive companies and wanting low-priced disk drives to go into computers costing $500,'' said Jim Porter, president of Disk/Trends Inc., a Mountain View research firm. As a result, the profit margins of companies like Seagate and Quantum Corp. have dropped considerably. Analysts predict the industry will have to consolidate to weather the slump. But rather than run away from the budget PC market, Conner's aiming straight at it. His company, which now employs 40 people and expects to have products available by the second quarter of next year, will be the first in the industry to exclusively target the sub-$1,000 segment. Profits there are lower, but Conner Technology will be streamlined to have lower overhead and operating costs than competitors, he said. Conner's been out of the disk drive industry since the $1 billion Seagate acquisition, due to a non-competition clause. In the three years he's been away, he's invested in an Internet venture and a golf club company. His time away gave Conner perspective. ''It was a great time to get my head clear and look at where the market trend was going in industry,'' he said. ''This model that we're off to execute upon is really going to be the model of the future.'' For now, the analysts are withholding judgment. ''He is walking into a storm,'' said Disk/Trend's Porter. ''We'll have to see how it plays out. He's not to be taken lightly. He's a very good showman and understands the market.''