Quote Originally Posted by saaya View Post
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thats like saying, hey, weve been selling at a loss for a while but now we realized thats not a good idea and will stop selling those products. ^^
That is exactly what they are doing

What you demonstrate is that there is significant competition for their ram products. The OCZ report states that memory net revenues decreased $2.3 million, so you have a scenario of reduced volume and reduced margin. Not good. What matters is your profit margin and clearly they are losing money on some of their memory products because they are trading at a loss.

If certain products are not profitable enough (or even worse they are losing you money) you need to get rid of them fast to free up cash to invest in more profitable opportunities. If you don’t you go under.

SSD is already close to 50% of their total sales and it’s where they are making money and increasing volume. If it wasn’t for SDD they would probably not be trading now. It makes sense to focus on profitable products and profitable market sectors. Hence they will still sell profitable memory to the enthusiast sector. For SSD they will still sell SSD to the enthusiast sector, but they are clearing trying to focus SSD to the enterprise market to maximise sales growth opportunities. Sales of SSD at the current pricing levels will be limited in the enthusiast sector, which is also now becoming very competitive. Sales of SSD to the enterprise market on the other hand is likely to be a growing market. Even at the current pricing levels they are attractive to the enterprise market when a single SSD can do the work of 10 HDD’s.

The announcement is simply a way of reassuring the markets that they are taking action so they can return to being profitable.

This is good news for everyone. Cutting corners to try and retain margin is never good news.