Storage industry stocks sell off following EMC's Q3 miss

Seagate (STX -1.8%), Fusion-io (FIO -5.3%), and OCZ (OCZ -5.7%) have joined NetApp (previous) in selling off following EMC's (EMC -3.7%) Q3 miss.

The storage giant's mainstay Information Storage unit saw a slight Y/Y drop in product sales, as 66% growth in flash and scale-out storage sales failed to offset an 8% Y/Y drop for high-end storage, a mere 3% increase in mid-range and backup/recovery hardware, and a 6% drop for other storage products.

EMC's numbers follow a Q2 for which IDC estimated total disk storage systems sales fell 5% Y/Y, and external disk storage sales dropped 0.8%. EMC was assigned a 24.2% share of the former market (+170 bps Y/Y), and a 31.3% share of the latter (+90 bps).

EMC blames its Q3 issues on U.S. federal demand; the company isn't alone in seeing federal weakness. However, both server and storage hardware sales have been pressured by the adoption of commodity/white-label hardware (generally using cheaper hard drives) by Internet giants and cloud infrastructure providers such as Google, Facebook, and Amazon.

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