Conner's Drive Is Getting A Bit Gummed Up

Ever since it got rolling in 1986, Conner Peripherals has been the darling of the hard-disk-drive industry. In 1987, its first full year, it set a sales record for a manufacturing startup by rocketing to $113 million--beating the record set by its biggest customer, Compaq Computer Corp. And by exhorting his engineers to outpace rivals in designing the smallest and speediest drives, Chairman Finis F. Conner has kept sales climbing in every single quarter since. No more. On Apr. 17, the San Jose (Calif.) company announced that sales for its first quarter, which ended on Mar. 31, fell 10% from the fourth quarter, to $382 million (chart). The main culprits: increased competition and parts shortages. Both problems lead some analysts to question Conner's vaunted product-design and manufacturing strategies. Says Dataquest Inc. analyst J. Philip Devin: "Conner's glory days are over."

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