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Hi Robert,
Thanks for your insights into the PC box and drive makers. Could you give us
a little more backround about your vantage point ? (i.e. what you do, and
how you know that Dell is losing market share)
If true, this is timely information, as Dell has been holding up the Nasdaq
almost singlehandedly......(look at it's strength the last few days !) and
if you have some numbers, it would be much appreciated.
Incidentally, Dell beat earnings by 4 cents as you all know, but the
percentage increase was down to 70+ percent this time, thereby breaking the
100+ barrier.
It's was inevitable of course, just due to large numbers, but it's still
fully priced for it's multiple.
Thanks,
Dick
-----Original Message-----
From: Wizard <cwizard@xxxxxxxxxx>
To: metastock-list@xxxxxxxxxxxxx <metastock-list@xxxxxxxxxxxxx>
Date: Sunday, December 14, 1997 8:21 AM
Subject: Hard Drive Mfgs.
>Hi All:
>
>I see that some of you are interested in hard drive manufacturers. This
>is not a healthy sector. Seagate is closing down a plant in Ireland
>they've had since the early days of pcs, Western Digital and Quantum are
>hurting. Micropolis went out of business with no warning Nov. 10th.
>
>With Samsung a major player in the 3.5 HD market, expect to see the
>other guys really hurting by this spring due to the deflation of the
>Korean currency and the price advantage Samsung will have.
>
>The hard drive mfgs. have about killed themselves off with price
>cutting. They thought volume would make up for margin; it doesn't. I
>anticipate that Samsung will be unloading a whole series of components
>at a deflationary price. Short term great for the consumer, e.g. get
>your Samsung 21" monitor for maybe 700-800 dollars, long term bad for
>the industry with fewer companies left. I got stuck with a ton of
>Micropolis equipment.
>
>I've been in the pc business for 15 years and have never seen things so
>messed up. The mfgs have priced themselves and resellers practically out
>of business.
>
>Just a note about Dell: The only reason Dell has made such unexpected
>profits has not been due to sales but component deflation. HP, Compaq
>and IBM are going after them now with channel assembly. They have lost
>their price advantage and are losing big accounts to Compaq already. By
>this summer, the darling of CNBC is going to have less than stellar
>performance. I guess this is why Michael Dell filed to sell 300,000
>shares last week.
>
>Robert
>
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