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Stop the madness, Quantum boss pleads

Seagate fingered for slashing prices

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Disk drive manufacturer Quantum, is calling for an end to "unsustainable" price cuts across the industry. Mike Brown, chief executive at Quantum said that Seagate was one of the worst culprits. Quantum accused its rival of pricing its products below its costs, which forced others to do the same. Quantum said that it would not cut prices to gain market share, and he asked the rest of the industry to follow suit. He commented: "We can’t go on with everyone losing money." Seagate's financial officer, Don Waite, denied Brown's accusations, saying that Seagate was not deliberately losing money. Prices in the industry have been falling at three or four times the usual rate, illustrating a significant slump even in an industry famous for its ups and downs. But analysts are divided about who is to blame. John Donovan, an analyst at Trend Focus, told the Wall Street Journal: "The game now is who can make things cheapest, and that is Seagate's strength." He pointed to the U-series of drives. He said that Seagate was able to make these cheap, but still make money. Quantum said that it would not cut prices to increase market share, but it would do so to defend it. Seagate was unimpressed, and Waite finished: "We have a strategy, and we don't intend to change it just because our competitors are losing money." ®

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