Storage Market Perspective

October 19, 2006

Seagate and WD Offer Mixed Signals

As we approach the holiday season, Horizon is seeing some interesting positioning within the market. Seagate’s CEO announced the continued price war in the lower capacities. Horizon heard through the grape vine that WD, over the past two weeks, has raised distribution pricing three times. Without any recent product transitions, it appears that WD has a different perspective on the market.

Seagate has also announced that they are proceeding with a dual brand strategy by maintaining the Maxtor product line as evidenced by the release of the new 2.5” Maxtor mobile drive. By maintaining both brands, Seagate will be able to maintain market share, maintain profit levels, and maintain a presence in the consumer market with the Maxtor brand.

Desktop

Horizon has seen spot shortages in the desktop market in the higher capacities of 250gb, 300gb, and 750gb, particularly in PATA, as well as continued supply restraint in 40gb and 80gb capacities. Driven by strong demand, Seagate pricing of the 750gb capacity has jumped nearly 20% this quarter from its initial introduction. The 250gb and 300gb capacity shortages are driven by demand from manufacturers of external hard drives and personal video recorders.

The market is in the midst of a transition from PATA to SATA. This time last year the market split between the two interfaces - 70% PATA and 30% SATA. Currently Horizon is seeing market demand for 70% SATA, leaving 30% of the market to PATA. The refurbished market typically trails the market by eight to twelve months leaving a 70% PATA to 30% SATA split.

Mobile Market

The SATA mobile space is increasing in open market activity. Horizon is seeing WD and Seagate start to increase their production and shipments into the channel, with product trickling into the open market. However, Horizon does not think the increase in shipments is enough to impact prices over the holiday build schedule.

The micro drive (1.8”) market activity is still robust. Demand has surfaced recently for EOL Toshiba drives (MK2006GAL, MK4006GAH and MK6006GAH). Demand continues to be due to the growing IPOD market. Although, Horizon expects the 1.8” to find its way into other product lines and potentially put upward pressure on pricing.

Demand for 2.5” PATA product has been declining over the past few weeks and as result Horizon has seen prices for 40gb and 60gb 5400rpm fall 5-7%. In addition, Samsung has recently moved large volumes of lower end 2.5” drives into the open market in 20gb capacities.

SCSI

The SCSI market continues to remain uneventful with very little demand indicating a trend either way in the short term. However, Horizon does expect the consolidation in the SCSI market detailed in previous reports to impact the market in the future.

For availability and pricing contact: 949.595.8244 or visit www.horizontechnology.com

• Privacy Statement
• Terms of Use
• Sitemap