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To: Gus who wrote (6265)	11/6/1998 3:22:00 PM
From: David Jones	Read Replies (1) \| Respond to of 7841

Nice post...Yeah, it's still fashionable to assume that cheap overseas drives are to blame for the industry's woes. Everybody's favorite fashion victim, the Motley Fool, is particularly guilty of dispensing this amazingly stubborn point of view.. Fact is we all need cloths but fashion defines the hem line. Dave Sorry couldn't resist.)

To: Gus who wrote (6265)	11/6/1998 3:57:00 PM
From: manohar kanuri	Respond to of 7841

Clear. Concise. Excellent. mano

To: Gus who wrote (6265)	11/6/1998 4:08:00 PM
From: Sam	Read Replies (1) \| Respond to of 7841

Gus, I see no way that Hyundai and Samsung will get together. Hyundai and LG were ordered to merge by the government, and haven't been able to do it. The rivalry between these Korean companies is as bad or worse than the rivalry between C, F, and GM. As for QNTM and heads--better to buy on the merchant market than to keep producing them at a loss. TDK's capacity expansion may be related to this. No time for more right now. Later, s.

To: Gus who wrote (6265)	11/7/1998 12:13:00 AM
From: Z Analyzer	Respond to of 7841

<<Another way of looking at this is gross margins. My understanding is that Fujitsu and Maxtor -- the two fastest growing drive makers -- currently still have the best capacity utilization rates in the industry. As this rate goes higher, each incremental sale of drops more quickly to the bottomline. That translates into pricing flexibility>> To nitpick a little, the incremental profit of producing another unit should change little, if any, solely as a result of being at 50% or 90% of capacity. It makes sense for any producer who can sell for greater than variable cost to sell another unit to do so. Lack of volume for a given producer is more likely attributable to failure to qualify with OEMs and/or to severe yield problems which bring variable profits down near zero on sales into distribution. Its not clear to me that any of the drive manufacturers are so altruistic as to forego variable profit for the good of the industry, despite the claims to the contrary. And the manufacturers losing the most money are least able to afford being altruistic. To take it a step further, since drives are not perfect commodities, economic theory would dictate that each manufacturer would produce until the point where diminishing prices on THEIR drives (which are more impacted by their production than overall industry prices) would begin to to lower their total variable profit. Z