STOCKWATCH: HP/EMC stoush brings tone down
STOCKWATCH: HP/EMC stoush brings tone down
The distasteful row between Hewlett-Packard and EMC over patent infringements gave a slightly off-colour hue to the industry this week, as investors worried about lost focus.
HP lost 36 cents on the day of the announcements to close 3 per cent down at US$11.67, with most of the losses already regained at last night's closing price of US$11.90. EMC dropped 8.6 per cent from US$5 to US$4.57 on the day and has since bounced back up to US$4.88.
Elsewhere, Network Appliance CEO Dan Warmenhoven got a lukewarm response from markets when he told analysts that IT spending was "still declining, but I feel pretty good about spending on storage".
Warmenhoven claimed that storage was claiming an increasing slice of IT budgets. Despite a huge product and PR blitz to launch its new unified storage approach, the company's stock failed to rise off yearly lows. Although the stock rose yesterday on news of the announcement from US$7.33 to US$8.05, it fell back again overnight to US$7.03, only a quarter of its high at the turn of the year and near its 52-week low of US$6.20.
StorageTek took a slight hit when it announced that it would follow several other hardware vendors by outsourcing its manufacturing and laying off 200 workers. Production of the SN6000 product will now be entrusted to Wipro at its factories in Minneapolis and France. Recent announcements like this from Quantum and others point to a gradual commoditisation of hardware componentry, brought on by the open standards push of the Internet. StorageTek's stock closed down 25 cents to US$11.00.
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