Seagate forecasts weakening shipments of hard drives and slight price erosion, while the company banks on new hybrid drives slated for release later this year.
The hard drive industry is returning to a state of normal as far as hard drive availability is concerned, but is now facing macroeconomic headwinds. Seagate company sold about 66 million hard drives - a 42 percent market share - in the most recent quarter (fiscal Q4, calendar Q2). Revenue was $4.5 billion and profit was $1 billion. While the industry has recovered from the disastrous Thailand flood last year, Seagate now says that it expects sales of only $4 billion this quarter - a statement that sent Seagate's stock down 8 percent during trading today. The company added that average selling prices for HDDs will remain nearly stable this quarter as a decline of less than 5 percent is expected.
On the product side, Seagate said it was pleased with the demand it saw from the enterprise cloud segment as well as strong notebook drive sales that were up 12 percent over the first calendar quarter. Seagate is still following a strategy that favors hybrid hard drives over SSDs. CEO Stephen Luczo said that the company will be launching the firm's third-gen client hybrid drives, this time in a 7 mm form factor, later this year.
However, the executive also noted that Gary Gentry "will be rejoining Seagate as senior vice president and general manager of [Seagate's] SSD business." Gentry was general manager of Micron's enterprise SSD business. He also stated that "in addition to the enterprise SSD products [Seagate is] shipping today, [the] technology partnership with Samsung has progressed on plan and has resulted in a highly competitive Tier 0 product." The company expects to ship test units of this product "at the end of this quarter."
There was no information on Seagate's rumored interest in buying a consumer SSD company such as OCZ.