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

To: Sam who wrote (6424)	5/24/1999 6:17:00 PM
From: Gottfried	Read Replies (1) \| Respond to of 9256

Sam, Gerstner's words from the Q report >>Louis V. Gerstner, Jr., IBM chairman and chief executive officer, said: "We started 1999 with a strong quarter. We saw a significant improvement in our business in Asia, and we also had double-digit revenue growth in Europe and the Americas. Our operating results were excellent, led by services and software -- which together produced 60 percent of our gross profits this quarter. Our Technology Group results were mixed, with growth in hard disk drives offset by continued weakness in memory chips. Our PC unit also had substantially improved results.<< ibm.com Not specific, but sounds like HDDs are profitable. Gottfried

To: Sam who wrote (6424)	5/24/1999 10:34:00 PM
From: Henry W Singor	Read Replies (1) \| Respond to of 9256

Sam and Z Analyzer I thought I would respond to both of your messages at once. Sam Said >Why will the profitability of IBM's drive operations improve if they are no longer the areal density leader? And do we know that they are profitable? How do we know this? I meant to imply that their gross margins will improve if the ship only higher end drives rather than a combination of high and low end drives. Much like Seagate makes better margins at high capacity points rather than low priced desktop units. Z wrote >My understanding has always been that IBM was into enterprise, noebook and high end desktop. I don't believe they were too big in low capacity desktop drives. Somehow, I also doubt they will be very far behind in getting to 6.8. -Z Read my earlier post and follow the links there. exchange2000.com Also QNTM has been shipping 6.8's since April. Maxtor is scheduled to begin volume in June, WDC will be sometime in July, I have heard no news from IBM although WDC did claim to be using IBM heads. Sam Wrote >I thought that their plan was to use WDC as their effective proxy for lower end desktop, making their money through higher margin component selling rather than assembled drive selling. That is something that I speculated in the above post. It seems reasonable but I know of no official release from either company that would state this to be the case. Henry