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Strategies & Market Trends : Value Investing
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To: Shane M who wrote (43536)7/24/2011 11:55:09 PM
From: armi  Read Replies (2) of 78702
 
Traditional Hard Drives are going to be cheaper and cheaper the more we go into the future. IMO, that's why Samsung and Hitachi sold their hard drive businesses because the margins are not that spectacular and also demand will continue to soften into the future.

Make no mistake, there is a very good chance that traditional hard drives will stay around for a long time because they offer superior storage and barely any speed loss in 99% of the tasks by everyday individuals. However, there's no way for me to figure out whether or not chip memory will completely replace traditional spinners but I have been picking up signals from developments into the future, for example, Cloud. The basis of Cloud Computing is for computers to rely less on internal storage as everything is stored in a remote server elsewhere and therefore computers will turn into terminals. This seems like its going to encourage laptops that are more portable and that's where chip memory will definitely be the choice over traditional spinners.

Overall I skip this sector because its still somewhat blurry to me but if I had to pick a company from this sector, i'd choose SNDK and hold it. Demand for chip memory is going to grow and i'd rather bet on that than calculating the life left in WDC/STX.

Keep in mind, product wise WDC > STX but STX is the MUCH more attractive purchase here. The recent purchase of Samsung's Traditional Hard Drive may have enough R&D to propel traditional Seagate Hard Drives over WDC.
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