Seagate will maintain a second place position in the hard drive manufacturing business and “considerably boost the newly merged entity’s overall standing” in a shrinking field, according to new research conducted by analyst IHS iSuppli.
Seagate’s buy-out of Samsung’s competing HDD division last month should play a large part in its success moving forward, believes IHS Storage Systems analyst Fang Zhang. He also reasons that the acquisition bodes well for the remaining three HDD makers.
“Overall, the reduction from five to three manufacturers considerably improves the stability and efficiency of the HDD industry,” said Zhang.
Western Digital, the current HDD market leader, had previously reduced the number of competitors by one when it bought out Hitachi Global Storage Technologies in March. The $3.5 billion deal resulted in just four remaining major players in the HDD field: Western Digital, Samsung, Seagate and Toshiba/Fujitsu — the last a product of a 2009 merger which currently rounds out the market with a scant 10% share.
The former competitors now face down giant Western Digital together, but not without some difficulty, says Zhang: “The acquisition also signals a recognition by Seagate and Samsung that conditions in the storage space will become more challenging in the future.”
Western Digital currently maintains 50% of the HDD market according to the analyst’s findings, with the newly minted Seagate/Samsung alliance holding 40%.
The report follows Seagate’s announcement that it has created a 3.5-inch, 1 Terabyte per platter hard drive — a world’s first says the company, and certainly some proof against the long-held belief that less competition leads to fewer innovations. (Via IHS iSuppli)