Symantec (NASDAQ:SYMC) is going to face stiffer competition from McAfee (NYSE:MFE), which was recently acquired by the semiconductor giant Intel (NASDAQ:INTC). Symantec competes with McAfee in the security software market for consumers as well as businesses, while its major competitor in storage software market is EMC-acquired Data Domain.
Fierce competition from bigger players could block Symantec’s market share growth in the storage software market, leading to a modest stock downside. We estimate Storage Software constitutes around 40% of the $22 Trefis price estimate for Symantec’s stock, (about 62% above the current market price of $14).
In the past, Symantec’s Share in the Storage Software Market has decreased from about 20% in 2005 to 19% in 2009. Symantec’s market share decreased till 2007 because IBM (NYSE:IBM) and other small vendors increased their presence at a faster rate than the overall market.
The average of Trefis member forecasts for Symantec’s Share in Storage Software Market indicate an increase from 19% in 2010 to 20% by 2016, slightly lower than the baseline Trefis estimate which is expected to reach 21% by the end of the forecast period.
We expect Symantec’s Share in Storage Software Market will increase, but at a slow rate, driven by the company’s cost effective storage solution which uses mechanisms like data deduplication to reduce storage hardware requirements of companies up to 90% and bandwidth requirements up to 97%. But Data Domain, Symantec’s storage competitor, specializes in data deduplication technology and the strength of Data Domain’s market position could hinder Symantec’s market share growth.
What do you think? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Symantec’s stock to Symantec’s Share in Storage Software Market.
Disclosure: No positions