At Seagate Technology, in Scotts Valley, Calif., Jeff Burke, director of market research, is keeping track but counting on "a good cost structure that allows us to play where most of the volume is." For hard disk drives, this is in the $130-$170 range, the sweet spot for the under-$2,000 system market. "Seagate will argue you can get the best cost structure by being vertically integrated. Probably we're the most vertically integrated business besides IBM."
The low-end trend requires a greater variety of drives for consumers, who want more functionality on a cheaper machine. "It creates a lot of opportunities," he said.
Logistics grows as an issue. "Big companies like Compaq want to cut inventories down and do it just-in-time. The ability to have local inventory for drives is very important, and we're partnering with customers on the new logistics," Mr. Burke added.
In addition, Seagate product marketing manager Denise Lippert noted that the user base for PCs is more sophisticated. "That's one of the biggest changes. People are buying second and third PCs. You have a stronger technical knowledge base out there at the consumer and reseller level, and the PC has become more complex. A lot more devices are being installed in it; functionality has expanded. More users will be willing to try updating to extend existing PCs. At Seagate, we have
enhanced the design by putting a device like SeaShield, a protective cover for the drive's printed circuit board which helps improve reliabiity and make installation easier," Seagate said. Also included is a label that includes installation instructions.
"This may make it easier for the reseller to integrate the drive, which can cut down on warranty costs and technical services."
sumnet.com |
