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The well known fact that Western Digital Corp. shipped more hard disk drives (HDDs) in the calendar first quarter of 2010 than its arch-rival Seagate Technologies has been confirmed by independent analysts from iSuppli. Nonetheless, Seagate still earns more than WD selling its hard drive products, the market tracking company claims.

WD on Top, Finally

Western Digital shipped a record 51.1 million HDDs in Q1 2010, up 3.2% from 49.5 million in the fourth quarter of 2009. In comparison, Seagate’s HDD shipments amounted to 50.3 million units in the first quarter of 2010, up 0.8% from 49.9 million during the previous quarter. But in spite of WD’s success, Seagate continued to lead on the revenue front at $3.1 billion, compared to Western Digital’s $2.64 billion, iSuppli data show. Despite a second-place finish in shipment levels, the larger revenue total is attributed to Seagate serving the high-end enterprise sector, which garners larger financial returns. In comparison, Western Digital employed a lower-cost business model that translated into reduced average selling prices (ASP) and less revenue overall.

Hitachi Global Storage Technologies, Toshiba/Fujitsu and Samsung Electronics retained their rankings from the previous quarter. However, while Hitachi showed the strongest quarter-over-quarter growth among the Top 5, up 13.9% during the period, both Toshiba/Fujitsu and Samsung registered shipment declines.

Despite the switch in the shipment rankings, the head-to-head competition between the two giants will Seagate Technology continue, and Seagate will experience pressure from 31% Western Digital in the battle for the top market position in the future. While the low-cost model might cost Western Digital some revenue,that same approach will be the company’s point of leverage in its quest to pick up more business so that it can undermine Seagate, iSuppli believes.

Industry to Maintain the Balance

Which company will take or keep the No. 1 position in the future will depend on a number of critical factors, including product competitiveness in the market, new product offerings, success in maintaining existing business while being able to penetrate new markets and capability to control demand and supply without jeopardizing or losing potential opportunities.

In the meantime, both Seagate and Western Digital continue to operate under tight capacity, with the situation easing somewhat in the second quarter due to slight seasonal declines in overall shipments.

Furthermore, various HDD companies have stated their plans to increase capital spending this year, iSuppli has learned. Western Digital said it will spend $1.2 billion during the next five years on its plants in Malaysia, a figure considerably higher than the $650 million to $750 million in general that the company had allotted in 2010. Likewise, increased capital expenditures have been announced by the likes of Toshiba, Samsung and Hitachi. Because of the augmented capital expenditures from HDD manufacturers, the industry can be expected to maintain a balance between supply and demand in 2010, iSuppli anticipates.

Tags: WD, Western Digital, HDD, Business, Seagate

Discussion

Comments currently: 1
Discussion started: 06/05/10 10:48:22 PM
Latest comment: 06/05/10 10:48:22 PM

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Those Cheetahs and Barracudas certainly do rake in a lot more money than those Velociraptors.

I only wish that those 15k RPM SAS drives were more mainstream and affordable. I mean, the noise is still much more bearable than those stupid GTX 480 cards (or many other GPU/CPU coolers). The power consumption is still nothing to worry about unless one wants to build a server farm. A 600GB Velocripator still cannot hold a candle to a 600GB Cheetah that runs at 15000 rpm. I still think that a 15k Cheetah is better value than a good SSD, since it is the sweet spot between performance and storage space while guaranteeing greater reliability than SSD's in general.

Only if SAS drives were more popular (my Bloodrage motherboard has 2 SAS ports), they would be cheaper as the production would have been much higher to capitalize on the mainstream market that is now spending a pretty buck on SSD's. I would still rather have a couple good-sized 15k rpm SAS drives in RAID0 than hybrid 7200rpm drives with tiny SSD "flash memory" in them.

Let's see what the future brings.. IMHO, Seagate is lucky to still make good $$ after its reputation was somewhat tainted by its infamous 1TB and especially 1.5TB drives.
0 0 [Posted by: Bo_Fox  | Date: 06/05/10 10:48:22 PM]
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