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Sun Dogs Dot Hill: Page 3 of 3

The downgrades took a toll on Dot Hill’s stock today. By mid-afternoon, shares dropped to $9.50, down $0.54 or 5.38 percent.

The good news for Dot Hill? Some analysts who've issued cautions lately expect brighter days ahead. Deutsche Bank is encouraged by the prospect of new business from Sun and IBM Corp. (NYSE: IBM), a recent acquisition of SAN controller vendor Chaparral Network Storage (see Dot Hill Picks Up Chaparral), and an expected ramp from SATA sales in the second half of the year. Susquehanna’s Kaushik Roy forecasts Dot Hill’s SATA deal with Sun to be worth $15 million to $20 million in the second half of 2004; and he expects Sun to have a strong June quarter.

— Dave Raffo, Senior Editor, Byte and Switch