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

To: Zencone who wrote (348)	12/11/1998 5:18:00 AM
From: Duker	Read Replies (1) \| Respond to of 1989

SEG Sees Higher Disk Drive Demand; Faces Pdt Shortages Article in this morning's paper ... Seagate Technology Inc. Dow Jones Newswires -- December 11, 1998 Seagate Sees Higher Disk Drive Demand; Faces Pdt Shortages SINGAPORE (Dow Jones)--Demand for disk drives is picking up and Seagate Technology Inc. (SEG) said it's facing major shortages across its product lines, a senior executive said Friday. Senior vice-president of international sales operations Joel Stead attributed the higher demand and shortages to the usual seasonal demand and the need to fully utilize corporate and government budgets before the year-end. "We have five product lines on shortage," he said. "That's about 30%-40% of our total product lines." Seagate is "trying to ramp up production" on PC disk drives, manufactured in China and Thailand, and on high-end drives, produced in Singapore, Stead said. The strongest demand so far has come from Europe, followed by the U.S., he said. Despite "bright spots" in China and India, Asian demand remains sluggish, he added. But, despite the increases and signs that the glut in the PC industry has subsided, Stead said a "dramatic uptick" in disk drives isn't likely. Nevertheless, he said the company hopes for a 15%-20% increase in demand for the disk drive industry next year. Likely to contribute to such an increase is the need for new computer systems arising from monetary union in Europe from next year and problems associated with Y2K. With recent management changes, product line rationalization and a greater focus on the customer, Stead said Seagate hopes to improve profitability. Gross margins for the last quarter ended September stood at 20.7%, an improvement from 18.9% in the previous quarter, before which margins had been declining for nine months. Further improvements, which the company anticipates, depend on the execution of recently-undertaken initiatives, he added. "We've made a lot of changes - management, rationalizing product lines," said Stead at a press conference. "I think we're more customer-focused and driven under Luczo than before." Stephen Luczo was elected chief executive in July and named president in September. Also positive news for 1999, Stead said, is the recent reinstatement by technology market research firm International Data Corp. of its forecast for an 11% increase in PC shipments. The glut of PC's in the industry some 11 months ago shows no signs of resurfacing either, he said, adding the company isn't experiencing an oversupply in any product line. The entrance of ultra low-cost PC's opens up new markets for Seagate, Stead said, adding that the company is pursuing the opportunities for that market through its investment in research and design. The company foresees strong volumes for this category of PC's, which are priced at between US$500 and US$800, he added. -By Camille Klass; 65-421-4800; cklass@ap.org

To: Zencone who wrote (348)	12/11/1998 6:05:00 AM
From: William Epstein	Respond to of 1989

BARUCH; The most important thing is, whether or not, the industry and SEG, in particular, can stay profitable. If production costs can decline in proportion to price. I am not qualified to make a call on that. Stitch is the guy for that. Thanks for the news item. Its food for thought. PHOTOMAN

To: Zencone who wrote (348)	12/11/1998 9:53:00 AM
From: Sam	Read Replies (1) \| Respond to of 1989

From your linked article: <<''In the early 1980s, the standard unit of computer storage, one megabyte, cost about $100. Today it is 10 cents and in two years it will be two cents,'' Stanca told an IT (information technology) and telecommunications seminar according to a copy of his prepared speech.>> I don't know what planet Stanca is on, but .02/mb is already here for higher capacity drives. If the IBM drive division is selling its in-house customers storage for .10/mb, then no wonder their drive division is showing huge profits and growth. This is such an oulandish quote that it must be a misprint.