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Technology Stocks : PC Sector Round Table -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (1748)	5/6/1999 9:31:00 PM
From: Mark Oliver	Read Replies (2) \| Respond to of 2025

T is absolutly ready to spend and doing so at a high rate. They've recently been called in their agreement with the @Home partnership. TCI has been the slowest to develop broadband. They must boost spending to maintain their holdings and surely that is their goal. Anyway, I figure they will be spending at least 3 billion this year. <You know, I bought more at this level soon after the announcement. But I've been second guessing myself. QNTM keeps talking about doing something "entirely new" with network appliances, connected to the DLT division. > Very broad area to sell in. I feel Quantum wants to make a network appliance in the sense of something for servers at SOHO and larger businesses. They mentioned $1000 boxes. Can't really say yet what they mean and certainly they'll have competition, but in the past they've been component suppliers to HP and they will probably remain behind the scenes as OEMs. The report on the internet the Yogi recently posted has some very big numbers for businesses who will need to go online. They suggest 20,000 new web sites a day will be added. So, Internet is still a great growth business and it's only beginning. People need to find a way to make a site and how to make it useful, but that is quickly becoming obvious just with the spread of e-mail evverywhere. Regards, Mark

To: Sam who wrote (1748)	5/6/1999 9:52:00 PM
From: Frodo Baxter	Read Replies (1) \| Respond to of 2025

>Well, that sector is starting to get pretty crowded too, with companies as diverse as NSM and HWP saying that they are getting into it, not to mention NTAP and other existing ambitious cos. Suppose that business becomes the next sinkhole? Relative price of storage appliance using current model: 100 Relative breakdown: vendor net margin 25, HD maker net margin 5, cost of goods, R&D, SG&A, etc. 70 (vendor 15/HD maker 55). Relative price if HD maker vertically integrates appliance building and sells through OEMs: 85 Relative breakdown: reseller net margin 5, HD maker net margin 10, cost of goods, R&D, SG&A, etc. 70 (reseller 5/HD maker 65). As per the Forbes article, "In the fall it plans to introduce a $1,000 storage device that can be used as a miniserver, linked to the Net. Brown calls it a "plug-and-play" appliance: All you'll need is an Ethernet port into the network and a power plug." Okay, $1000 won't even buy you a 36GB drive, so this is ain't RAID yet. But what if a customer says, "Hey, good idea. But I need more iron." Will QNTM snub this market segment? I think not. Funny thing is, I think this belongs more appropriately in the QHDD tracker rather than the QDSS tracker... But perhaps they're gonna make the drive tracker the ditch into which they throw all their low-margin operations, kinda analogous to the KO/CCE arrangement. No matter, it still can't fetch a worse valuation than WDC.