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Technology Stocks : JMAR Technologies(JMAR) -- Ignore unavailable to you. Want to Upgrade?

To: timwa who wrote (7633)	3/26/1999 2:10:00 PM
From: Starlight	Read Replies (1) \| Respond to of 9695

No one has commented on this, but I'm wondering if this could mean more business for JMAR: Technology Headlines Thursday March 25 2:58 AM ET IBM In Supply Pact With Rival By Franklin Paul NEW YORK (Reuters) - International Business Machines Corp. (NYSE:IBM - news) reached a pact to supply EMC Corp. (NYSE:EMC - news) with up to $3 billion in computer parts in another example of IBM's strategy to boost profits by cozying up to its strongest rivals. Under the five-year alliance, EMC, the leading computer data storage systems maker, will increase the number of disk drive parts it buys from IBM, including high capacity models. In the future, the agreement will likely include other IBM products, such as microprocessors and advanced custom chips. The deal comes on the heals of IBM's $16 billion technology pact with Dell Computer Corp. (Nasdaq:DELL - news), announced earlier this month, the largest supply deal the industry has seen. Industry consultant Sam Albert of Sam Albert Associates of Scarsdale, N.Y., said IBM is using ''co-opetition'' -- a word he coined in 1991 for the strategy in which a company both competes with and cooperates with rivals. ''IBM is making unnatural alliances seem natural where it makes good business sense,'' Albert said of the EMC deal and other similar deals expected to be announced in coming months. ''It is participating with its fiercest rivals, competing on the one hand and cooperating on the other,'' he said. According to Dataquest figures, Hopkinton, Mass.-based EMC, the leading computer data storage systems maker, holds a 35 percent stake in the external storage systems market, compared with IBM's 22 percent share. ''Delivering our technology to companies that have been considered by other pieces of IBM as competitors has been a very nice growth business for us,'' David Ernsberger, vice president of sales for IBM Technology Group, told Reuters. Armonk, N.Y.-based IBM, the world's largest computer maker, has spent billions in recent years developing ground-breaking computer hardware and software technologies. For several years, IBM has led in the number of U.S. patents issued. The company is now reaping the rewards of that research -- providing outside companies, many of them competitors, with many of the same technologies IBM's own businesses incorporate in their own products. ''Since Big Blue's hardware business has been declining, the company is now committed to distributing its R&D (research and development) to major technology players,'' said Credit Suisse First Boston analyst Amit Chopra. ''They are getting more bang for the R&D buck,'' said James Poyner, an analyst at CIBC Oppenheimer Corp. IBM is already one of EMC's top suppliers, but opinions differ as to how far this would extend IBM's revenue flow. Poyner estimated that IBM's enterprise disk drive revenue was about $1 billion in the fourth quarter, out of a total of $25 billion. Sales to EMC made up about $100 million to $200 million in the quarter, or 10 to 20 percent of the total, he estimated. Poyner said the deal will include more high-end disk drives, a direct challenge to Seagate Technology Inc. (NYSE:SEG - news) Traders said the deal rattled Seagate's shares, which slipped $1 to $27.12 a share in active trade. ''IBM has won substantial market share in the last two years, from virtually zero as ... a supplier to about 40 percent of that market, and it all comes at Seagate's expense,'' Poyner said. But SoundView Technology analyst Gary Helmig said EMC is not likely to switch entirely to IBM as its storage supplier. ''EMC is never going to walk away from having multiple vendors,'' he said. ''I think EMC certainly must have a strong Seagate presence to keep IBM honest.'' Calls to Seagate Wednesday were not immediately returned. EMC's stock Wednesday afternoon rose $3.69 to $117.50 a share on the New York Stock Exchange, and IBM's shares rose $3.56 at $169.31.