Western Digital Maintains Top Position on Hard Drives Market

WD Leads HDD Market for Third Consecutive Quarter

by Anton Shilov
10/20/2010 | 06:50 PM

Western Digital maintained its leading position on the market of hard disk drives (HDDs) in terms of unit sales in calendar Q3 2010, based on recent financial reports from WD and its arch-rival Seagate. Although the gap between the two companies shrunk, the leadership of Western Digital is pretty evident. While Seagate still posted higher revenue, WD managed to become more profitable.

 

In the third quarter of calendar 2010, WD shipped 50.7 million of hard disk drives, about 1.5 million more than Seagate, which supplied 49.2 million HDDs. In Q2 the difference between the two companies was 2.9 million units, while in Q1 the gap was just about 800 thousand of drives, according to financial reports of the two world's largest manufacturers of hard disk drives.

Thanks to a large portion of enterprise-class hard disk drives among Seagate shipments, the company claimed higher revenue than Seagate, however, thanks to lower costs of manufacturing, WD succeeded in earning more than its arch-competitor. Seagate Technology reported revenue of $2.7 billion, gross margin of 20.4%, net income of $149 million and diluted earnings per share of $0.31. Western Digital reported revenue of $2.4 billion and net income of $197 million, or $0.84 per share.

Since Seagate is currently in negotiations about becoming a private company again, the company did not provide any outlook about the fourth quarter of the year and it is hard to tell whether the drive maker will be able to regain unit shipments leadership any time soon. Given that at present Seagate is considerably less profitable than Western Digital, it is clear that the company's cost structure is not currently optimized to take away unit shipments leadership from the competitor.