Hard drive market: The war escalates unexpectedly

Seagate Technology, the world's largest hard drive maker, said that competitors will be aggressively reducing product prices for at least a year, longer than most analysts anticipate.

CEO Bill Watkins said Seagate is ready to deal with hard drive "big discounts" launched by rivals like Hitachi and Samsung. They all aim to win more market share in this high demand market.

Watkins said the price war in the current hard drive industry will continue at least through the first half of 2007.

Source: CNET This prediction contradicts the views of the majority of Wall Street experts, who think that hard drive prices will likely stabilize again later this year, due to the Christmas shopping season stimulating demand from consumer side.

Watkins said the fiercest battle would happen in low-cost, low-end personal computers, with hard drives of 80 GB or less.

To win market share, Hitachi and Samsung both agreed to sacrifice profits in order to continuously lower the hard drive. " Having more market share in the low-cost components market is not worth losing profits, " Watkins commented.

" They have added market share and increased their total shipments, but it is a bad market share ."

Thien Y