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

To: La Traguhs who wrote (5915)	3/26/1999 4:11:00 AM
From: Stitch	Read Replies (2) \| Respond to of 9256

LT, <<Hard to comment on what I think is a new dynamic in two paragraphs> I am not sure it is a new dynamic but it certainly is taking front & center stage. Strange bedfellows has long been a feature of the DD industry but I agree with you that we are seeing an acceleration lately that will likely continue. Several reasons for this IMO. For one thing the Microsoft/Intel version of computing is nearing the end of its life, or so say some. For another the Internet paradigm while exploding, is still nascent and lacks definition (one of its beauties to many observers). Start talking computing appliances and most of us old timers go glossy eyed, the strain evident on our faces. Things are changing fast, and there is an incredible amount of money on the table. This is a ripe culture for partnering. But in simple terms it is also getting more and more painful to do business these days, maybe especially for our DD faves. Margins have gone to zip, competition continues to heat up, and 40% of the world is in a recession with another 20% poised to take the dive. Scary times indeed. Makes you want to spread the risk a bit, or at least the pain. In addition we shouldn't forget a couple of warning signals. Remember what Todd Bakar said at the IDEMA dinner in February? He said "Predictability and Visibility Remain Low, ASPs will continue to decline, Competition at EVERY level will remain high, and Supply chain management will be the key differentiator". And in another speech this month in Singapore Bill Watkins, COO of Seagate said that "virtual integration" was the way to go. Now if memory serves me well, it was the embattled Chuck Haggerty who first muttered that phrase. That was when SEG was still touting its vertical integration. I guess now they see the light under Watkin's leadership. And maybe they think their version of "virtual integration" is going to be different then WDC's was. If results are the proof of the pudding then I hope so. By the way, you left out a few interesting "strategic alliances". Quantum/Panasonic, Quantum/Tivo, Western-Digital/Sony to name a few. Accelerating change. It has always been a part of this business. So what has changed? Answer-> Everything always. Best, Stitch