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Technology Stocks : Jabil Circuit (JBL) -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (5028)	3/19/1999 12:39:00 AM
From: kolo55	Read Replies (1) \| Respond to of 6317

Solectron is not 'extremely competitive'. In fact, Solectron's CEO disagrees with you. Koichi Nishimura says that they don't compete at all with the other ECM players!! And in effect, that is often the case. Solectron is entering entirely new markets and fields, expanding the role of the EMS sector (from manufacturing to services), and into countries not even using EMS providers to a large degree (Japan). In particular, areas Solectron is planning to grow include channel PC manufacturing with their deal with Ingram Micro, consumer products manufacturing for the Japanese OEMs (Mitsubishi cellphones and Sony), IBM notebook computers, depot service and product support for high volume sales items, etc. If you knew Solectron so well, and knew Jabil, you'd know that in many of these areas, they don't compete at all. Jabil is focused on higher value added, lower volume higher priced items... although both are expanding into the computer segment. Also the implication in your post is that Solectron may take some business from Jabil. This is way off the mark. Seldom does an OEM move from one EMS provider to another. In today's rapid move to outsourcing, most of the large EMS providers will have more new work than they can handle, and will concentrate on getting the really good business opportunities. Both Solectron and Jabil can grow quickly at the same time. There is that much new EMS business coming. Both will average over 30% growth per year for the next five years; I just happen to believe Jabil will grow in excess of 40% annually over this time, because of its smaller revenue base makes that rate of growth more likely. As for your comments on stuffed channel etc., you are looking at the very short term, and not seeing the larger picture at all. The channels that are really stuffed is PCs and some consumer electronics items; yet Jabil has only one major PC program at the present (Gateway), and will see substantial increases in PC sector revenue when the Dell deal kicks in this summer/fall. Again your arrow was off target. Try again. Paul