Competition Driving the Disk Makers

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Headwinds Are Gathering Force by Bill Alpert

Highlighted companies: Seagate (STX), Hitachi (HIT)
Summary: Despite strong demand for drive storage as high-definition video-producing enters the market, Goldman downgraded Seagate from a Buy to Neutral. The reason? Even stronger competition among the disk manufacturers. Seagate will soon lose the claim to space fame of its 750- gigabyte drive, when Hitachi introduces its terabyte (1000 gig) drive. If Hitachi reaches its goal of bringing the drive to stores by March, as announced on Friday, it will be the first. Seagate has promised its own version of this disk size, enough to hold 250 hours of high-def programming, in the first half of the year. The Hitachi terabyte drive has a $399 list price, lowering the cost of storage to under 40 cents a gigabyte, compared to today's 45-50 cent range. Although PCs today require from 100 to 160 gigabytes, demand for the larger volume drives is expected from the direction of video, and competition in the business is likely to stay fierce in the foreseeable future.
Related: Hitachi Giving EMC Corp. a Run for its Money in the Enterprise Storage Business, Hitachi: HD-DVD is All About the Terabytes (HIT), Seagate Gearing up for 300 Terabyte Hard Drive, Goldman Gets Cautious On Tech, Downgrades Software, Hardware, Indian IT