Here is a "where we've been" and "where we are now" overview of the DD vendors from Computer Reseller News:
May 17, 1999, Issue: 842
Section: 1999 Market Leaders
Disk Drives -- Tardy vendors receive swift punishment
Joseph F. Kovar
Disk drive makers that were late to market with leading-edge technology in 1998 received swift
punishment at the hands of aggressive competitors, resulting in dramatic shifts in market share.
The deck was reshuffled in this market as Seagate Technology Inc., Scotts Valley, Calif., Quantum
Corp., Milpitas, Calif., and Western Digital Corp., Irvine, Calif., all lost revenue and market share.
Meanwhile, IBM Storage Systems Division, San Jose, Calif., jumped into second place,
challenging Seagate's longtime market leadership. Fujitsu Computer Products of America, San
Jose, and Maxtor Corp., Milpitas, also made dramatic gains.
The CRN Market Leaders list is based on estimates of worldwide disk drive revenue, supplied by
Trend Focus Inc., Palo Alto, Calif.
According to John Donovan, vice president of Trend Focus, the time-to-market battle in 1998 saw
Seagate assaulted by IBM, and Quantum assaulted by Maxtor and Fujitsu.
Seagate retained its No. 1 position in 1998 with revenue of $5.9 billion, down 18 percent from the
prior year. After three money-losing quarters, the company returned to profitability by year's end.
Seagate kept its strong lead in the desktop and high-end enterprise segments, Donovan said. In the
meantime, IBM enjoyed strong unit growth in the enterprise, desktop and mobile drive segments,
and was the overall leader in SCSI drives.
IBM remained the No. 2 drive producer. Its 1998 revenue of $5.6- billion, up a whopping 47
percent from 1997, brought it to within striking distance of Seagate.
It was a terrific year for IBM, said Greg Enriquez, vice president of business line management for
IBM's hard disk drive business unit. "The overall industry didn't grow year-to-year in 1998 over
1997, yet IBM grew," he said. "We participated in all three segments of the industry and competed
well in each one."
Quantum kept its No. 3 ranking for 1998 despite a 23 percent drop in revenue to $3.7 billion.
Both Stephen Luczo, president and chief executive of Seagate, and John Gannon, president of
Quantum's hard disk drive group, said their companies lost market share because they gave up
their time-to-market leadership.
Luczo said Seagate lost the high-end time-to-market leadership to IBM in late 1997, and it showed
in 1998. "We regained that leadership with the Cheetah [family of drives], and are about even with
IBM now with our Barracuda [family]," he said. "But we are still behind IBM in the low end of the
high-end drive market."
Gannon said Quantum's decline largely can be attributed to losing the time-to-market battle for
4.3-Gbyte-per-platter technology to Maxtor.
"Maxtor gained big," he said. "It shows what losing time-to-market can do. However, we were the
first to announce giant magneto-resistive [GMR] drives with 6.4 Gbytes per platter. . . . We are
first to market with a product that can help us immensely."
However, Luczo said, time-to-market by itself is not a cure-all. "The tough thing about our
business is that changes we make today don't show up for six to 12 months because of
development cycles and qualification cycles," he said.
Western Digital's revenue fell 31 percent while Fujitsu's rose 45 percent, putting them in a tie for
fourth place with $2.9 billion in revenue each.
Larry Sanders, chief executive of Fujitsu, said his company shifted to GMR technology about the
same time as IBM, which contributed to Fujitsu's strong gains. "And . . . we were just a lot more
aggressive in marketing than in the past," he said.
Western Digital was distracted by its foray into 3-inch drives and stumbled in its core desktop
market, Donovan said.
While still struggling with a weak balance sheet, Western Digital has made strides in getting
products to market since then, Donovan added. "They've caught up in desktop drives," he said.
"Depending on how well they execute with 10,000-rpm SCSI drives, they could make some noise
this year."
Maxtor, No. 6, grew revenue 71 percent in 1998 to $2.4 billion. Mike Cannon, Maxtor's president
and chief executive, attributed the growth to improved relationships with OEM customers, which
resulted in faster time to market, more manufacturing flexibility and higher product quality.
Toshiba Corp., Tokyo, saw revenue fall to $1 billion, keeping the company in seventh place.
Revenue for San Jose-based Samsung Storage System Division, No. 8, rose 71 percent, reaching
$923 million.
Hitachi Americas Ltd., Brisbane, Calif., saw its revenue grow 147 percent to $615 million.
Copyright ® 1999 CMP Media Inc. |
