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

To: Z Analyzer who wrote (5300)	1/23/1999 11:43:00 AM
From: Frodo Baxter	Read Replies (1) \| Respond to of 9256

I agree with you that QNTM hasn't done enough to maximize shareholder value. But don't forget the management team is the best in a sector littered with sorry management. The heads ops was stupid dumb, we've said that for years. On the other hand, I'm optimistic about their high-end drives. This generation was the inflection point. They were the first Ultra2 drives to qual at Dell. The next generation is likely to ramp faster than Seagate's, steal share, and reach profitability. Let's not forget that channel stuffing is caused by obstinate management unwilling to cut build plans when their natural market share declines. To recap what happened, SEG came off 96 with a head of steam, unable to meet demand. By summer 97, the double ordering had stopped, new high-end competitors had appeared, and they were bleeding share. THEY DIDN'T CUT PRODUCTION; THEY DUMPED. On desktop, the situation was worse. Their desktop operations had been on the decline for years, and it was painfully obvious, as they were shipping low areal density TFI drives spinning at 4500rpm. THEY DIDN'T CUT PRODUCTION; THEY DUMPED. The consequent price declines swept up on WDC's shores, as they were busy marginalizing themselves with an idiotic, sole-sourced 1.7 TFI product (by guess who?). But guess what? WDC DIDN'T CUT PRODUCTION; THEY DUMPED. QNTM's channel inventory has always been lower than their competitors, they have never led the price-cutting brigade, and they're still ranked #1. Perhaps there's a reason, n'est pas?