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An upbeat note from Brean Capital's Ananda Baruah is leading Seagate (STX +3%) and Western...

An upbeat note from Brean Capital's Ananda Baruah is leading Seagate (STX +3%) and Western Digital (WDC +2.9%) to rally. In spite of weak PC sales, Baruah expects industry hard drive shipments to total 130M-135M in calendar Q1, down just slightly from Q4's 136M and in-line with guidance. Moreover, he sees the potential for 5%-10% 2H shipment growth, and ASPs and margins are seen benefiting from a mixture of better capacity utilization, stronger retail revenue, rising hybrid drive shipments, and a mix shift to enterprise and 500GB single-platter notebook drives. LSI +1.4%. MRVL +0.8%.
Comments (4)
  • shakazoid
    , contributor
    Comments (148) | Send Message
     
    I guess aliens would be the ones buying those hard drives. Even the so called hybrid hard drives are being shelved by OEM manufacturers for pure SSD in laptops. Another paid analyst trying to drive up valuations based on made up analysis.
    Hybrids are not worthwhile till you start adding flash storage of at least 128MB and in that case one might as well get a pure SSD
    26 Mar 2013, 01:24 PM Reply Like
  • Stock Market Mike
    , contributor
    Comments (2039) | Send Message
     
    Hybrid drives do a pretty good job to be honest. In real-world simulated benchmarking (PCMark, etc.) even 8-24GB of NAND makes a world of difference. In the future I predict that the vast majority of HDDs sold will have some sort of NAND cache to help alleviate their multitasking weaknesses, which can only be a win for NAND manufacturers. It just makes sense for HDD manufacturers to integrate the NAND to bring prices down. It might eventually add just ~$10 onto the cost of the drive, while a separate SSD (for caching or OS use) would add far more to an OEM design.

     

    There's always going to be $300 PCs, and those PCs can't necessarily fit a separate SSD into the budget, and might like to slap '2000GB HDD' onto the label for marketing reasons. (I'm thinking down the road)
    26 Mar 2013, 01:42 PM Reply Like
  • shakazoid
    , contributor
    Comments (148) | Send Message
     
    THe PC industry is a declining & commoditized biz. Look @ the historical share price of WDC or STX and you will find out they are @ there peak in a decade or 3 decades for WDC and this is in a declining market. Ask yourself if that makes sense in declining market.There's absolutely no reason why their valuation should be higher now than @ the peak of their market (the last decade) Neither company has a plan to fully start producing SSD, both are still focused on hybrids. While there's no doubt more storage will be needed in the future, most will be for enterprises where cloud and such will be housed. Most consumers will be buying external harddrives just to back up essential data while the rest will be based in the cloud.
    If the Touch UI adoption continues in the pc market, the desktop will be a thing of the past except in work places so the market will dwindle even faster. The advancement of cellphone has put a very big dent in the momentum of the pc biz.
    If either company decides to fully go into SSD production , then they have a chance to continue to dominate the storage market.
    Apple has the best impleentation of hybrid drives right now and it's only midway performance with it's SSD caching. Remember HD disk affect not only perfomance but also battery power, with ultrabooks becming norm , there will be no use for HD disks except in external drives for consumers. Here's good review & analysis of Fusion drives http://bit.ly/WUixNt
    26 Mar 2013, 04:31 PM Reply Like
  • lanettedonovan1
    , contributor
    Comments (31) | Send Message
     
    Interesting how there is such a debate about the HDD stocks. The bull argument I believe goes like this: There is only two (three with Toshiba) HDD vendors now and they know the market is in decline so they will not add capacity or be a price spoiler - driving down ASPs and ruining profits. The demand for HDDs will shift from notebooks to high capacity 10,000 RPM drives that will sit in cloud. Capacity growth will ultimately help overcome unit growth declines. Cash flow will remain strong because gross margins will not collapse (new 27-31% range) and companies will reward share holders with share buy back and nice dividends. I personally do not believe STX and WDC will keep pricing non competitive in the 10,000 RPM space and ultimately with unit declines the gross margins will fall to 22% range where the mean has been over the past decade. Stock prices will follow down gross margins.
    26 Mar 2013, 06:55 PM Reply Like
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