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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (113)	11/11/1998 11:14:00 AM
From: Hungry Investor	Read Replies (1) \| Respond to of 1989

All, Any thoughts on the INTC news regarding an increase in orders? The guest host on CNBC (can't remember his name) seemed to think that there was a large oversupply of chips on the market and that as much as 5 million chips of the 33 million to be produced in Q4 would wind up in inventories. This estimate included a unit growth of 20% in 4th quarter PC sales. This wouldn't bode well for SEG - and could lead to overproduction by all the desktop makers in Q4 if misinterpreted. Scott.

To: Stitch who wrote (113)	11/11/1998 11:45:00 AM
From: accountclosed	Respond to of 1989

I am not saying that cpu's have lagged from a scientific standpoint. I'm sure there are wonderful developments in the lab. What I was saying was from a consumer's viewpoint. This morning I have thumbed through the latest Dell mailing. The way a pc strikes me is that PentiumII 450 -- ho hum. The price/capacity quotient in disk drives has gone out of sight. The dell catalog ultimate config is 17.2g. Still near the high end are 14.4 12.9 and 8.4 gig configs. Even servers come with three 9 gig hot-swapped drives. There are a few notebooks with as little as 4 gig. In DRAM the ultimate is 256MB (upgrades are not priced prominently beyond 256). More typical is 128MB, 96, 64. Again the price of Dram has been on a radical ramp downward. I have the benefit of comparing a Pentium II~250 to a Pentium 166 each day and the difference is negligible. Dram is 64 on the ii compared with 32 on the pentium. I just can't see people calling Dell (gtw, cpq, whoever) and saying "Oh, no that drive just won't do...upgrade me to a..." Larger drives and cheaper (and thus more) Dram don't seem to be driving the upgrade cycle here. The biggest problem in performance that users are having is internet access speed. Three years ago's computers are good enough without a killer app. It just seems like to me dd manufacturers have gotten the science to the street faster than intc. You guys produce a steady stream of improvements in underlying technology. Intc just holds back on the mhz and then periodically ups the ante to make it seem like something is new. I don't know if you can pull the sense of what I am trying to say. I wouldn't pay 200.00 to get 40 gig instead of 20 gig on a new pc. You guys are ahead of your fellow component makers and software developers, imho.

To: Stitch who wrote (113)	11/11/1998 11:56:00 AM
From: accountclosed	Respond to of 1989

Sorry if previous message is not of highest clarity. Will try to work out more lucid response when I'm not on the run.

To: Stitch who wrote (113)	11/11/1998 12:23:00 PM
From: accountclosed	Read Replies (2) \| Respond to of 1989

Ok, I have a minute so let me continue on the Dell catalog. The first product in the catalog is the Dimension desktop series: Processor........Pentium2.......Pentium2.....Pentium2....Pentium2 Proc. speeed.....450mhz.........450mhz.......450mhz......450mhz disk drive.......17.2g..........14.4g........14.4g.......12.9 dram.............256mb..........128mb........128mb.......128mb display..........15" flat.......21"..........19".........17" price............3449...........2799..........2499.......2199 The point I am trying to bring out is the first four processors are the same. Yet the drive drops off in size. The dram drops too but not as steeply. The display option is on a steep grade. To me this shows a cpu hungry public. Like people are ok with less dd and less other options for lower price. Is 17.2 gig the largest qualified at Dell? If the situation was reversed, with the top four offerings having the same disk, but lower clock speeds on the cpu, I would say the public was disk hungry. The public is taking the bigger disks because they are available. And good common sense as killer app may come along. But this anecdotal evidence tells me it isn't the priority.

To: Stitch who wrote (113)	11/11/1998 1:02:00 PM
From: Kevin Linder	Read Replies (1) \| Respond to of 1989

How about this Stitch; The amount of data that the Hard Drive has been storing has increased rapidly in the last few years. However, the data transfer rates on the desk top segment has not been increasing as rapidly. The Ultra DMA 33 was introduced about a year or so ago. Before that the best data transfer rates were about 15 MB/SEC. CPU's have stalled, partially because of the bottleneck speeds of the Motherboard and Bus speeds. Last year the fastest CPU's ran at 233-266 MHZ. If I remember correctly the only reason why the 400-450 MHZ machines can operate efficiently was the introduction of the 100 MHZ Bus Motherboard. For many years the top speed of the Motherboards was 66 MHZ. (I believe I heard that there is a multiplier effect of 3 1/2 or 4 needed between the processor and Bus speeds). The Bus Speed, Video data rate, and other things have slowed the progress of the PC. Included in this is the slower data transfer rates of the older hard drives. INTC recognized this fact and has been dumping money into the venture capital market to speed up the video cards, bus speeds, memory speeds, etc. I notice a big difference between the data transfer rates of my older PC and my new computer with a ULTRA DMA 33. This year has seen the implementation and development of Ultra DMa 66; Ultra3 SCSI; and Gigabit Fibre Channel. It may just be a layman's opinion that the data transfer rate development has lagged the increases of the CPU market. I don't think this will continue in the future. The market was very quick to adopt Ultra DMA 33. The bigger program size of Windows 98 and other suite software will demand that speed start playing a more important factor in the future. How's that for a nontech evaluation of the market? Kevin Linder

To: Stitch who wrote (113)	11/11/1998 2:12:00 PM
From: manohar kanuri	Read Replies (2) \| Respond to of 1989

Go away for a couple of days and you have a new thread and a zillion posts! Many posts ago Gus noted: One datapoint that is relevant: commodity producers tend to sell below variable costs when the glut is severe and protracted. Fighting to live another day or living to fight another day? WRT commodity industries the manner in which that plays out is critical. I don't see any clear signs yet which tell me that SEG is playing the game on its own terms. It has the financial strength to do so but it remains to be seen if it has the strategy as well. They have not articulated it yet. For now I am out of SEG (and will keep my contribution to the thread at a minimum) because at 30 I think it is overvalued for a commodity producer. The VRTS stake is a red-herring - if I want VRTS I will buy VRTS directly and not use it to rationalize holding SEG. I'm discounting the Dragon stake for now - briefly, I think it has slipped to third place in the overall speech/voice league despite having the top spot in the dictation retail market. If I see the low-end/low-margin DD segment account for a lower percentage of SEG revenue that would be my first cue to think about jumping back in. And I would get really bullish if it constitutes a declining percentage of its revenue over the next few quarters. Either by keeping its share of the low-end market constant or even increasing it without decreasing margins. I would not jump back in if it simply drifts down to what looks like an "attractive" level. BTW, taking revenue up from 1.5 to above 2 is not a big deal. Trend growth and one or two bankruptcies should do the trick. IOM's numbers going forward should prove instructive in this regard. I find IBM to be a useful comparison and benchmark - it is in many cyclical and commodity markets but its revenues are cyclical only in terms of the overall market. "Focus" can be of many kinds. Smoothing out revenue could/should be one of them as well, unless the zig-zagging is along a steep upward slope in which case all sins are forgiven. mano