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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Duker who wrote (904)	6/7/1999 12:16:00 PM
From: Kevin Linder	Read Replies (1) \| Respond to of 1989

Interesting report and I think it shows the fragmentation that is happening in the DD industry. A good point is that SEG sold a little over 8 million drives last quarter based on their "Analyst information Sheet." Lets contemplate for a moment what a record breaking quarter would do with U-4 sales - what 1,2,3 million drives? At $90 per drive that is only $270 million dollars of revenue assuming 3 million drives sold. At a gross profit margin of between 10-20%(WAG) - that amounts to a profit of $9-18 per drive. This is a company of 83,000 employees - I have a feeling when indirect costs are figured in there is very little - if any - profit left for SEG. Stitch thinks they are making a profit and I defer to his knowledge - but, it seems that there can't be much profit unless other appliances begin integrating HDD's in higher volumes (MHO). That does not mean it is a bad strategy. Indeed the best pat of this is that it may create more pressure for a consolidation in the DD industry. it does look like it will be inevitable - just when is the question.