Seagate won't drive laptops
James Niccolai and Terho Uimonen (computerworld)
Seagate Technology, Inc. is quietly halting production lines for notebook PC hard drives, but one analyst said the small market share owned by the world's largest maker of desktop disk drives means its presence will hardly be missed.
Seagate is still shipping a limited number of 2.5-in. disk drives to OEMs in Taiwan but will suspend production in the very near future, said Phil Detwiler, Seagate's senior vice president of marketing. Detwiler said the move comes in the wake of stiff price competition. "We have a gap in our product plan that doesn't lend itself well to being in a leadership position," Detwiler said. "Rather than suffer with low market share, we'll probably withdraw."
Hard drives for notebooks must be smaller and consume less power than those in desktop computers, and as such they require very high levels of "aerial density" -- a measure of how much data can be stored on a disk's surface. Seagate will continue its research and development on laptop storage technologies, but it will be "easily a year" before Seagate reenters the market, Detwiler said.
Seagate's decision comes hard on the heels of similar announcements from Western Digital and JTS Corp., which are also pulling out of this business. The departures leave IBM and Toshiba Corp. as the main manufacturers of mobile hard drives.
Seagate's relatively small contribution to that segment of the market means its absence won't be greatly missed, said Bob Katzive, vice president of Disk-Trend, Inc., a consultancy in Mountain View, Calif. "There are enough smaller players out there to keep [IBM and Toshiba] honest," Katzive said.
Although the company is the largest provider of disk drives for desktop computers, Seagate supplied only about 7% of the 14.5 million hard drives for laptop computers shipped in 1997, representing less than 5% of the company's revenue, Detwiler said. It isn't immediately clear if the decision will mean further layoffs at the company's Singapore plant, where most of the mobile hard drives are manufactured, he added.
Scotts Valley, Calif.-based Seagate posted a net loss of $183 million on revenue of $1.67 billion for its latest quarter, ended Jan. 2, 1998. The firm cited declining prices, increased competition and slowing demand for its drives. Shortly before the results were announced, Seagate unveiled a restructuring program that involves trimming its worldwide workforce by about 10%. |
