Maxtor hard drives get Seagate genes

Scotts Valley (CA) - Seagate today introduced new hard drives under the recently acquired Maxtor brand. The desktop series has been "refreshed" and there is a new Maxtor mobile hard drive - both now carry the core technology of other Seagate drives, but will not offer the same capacities of their more premium sister models.

Seagate today allowed a first look at its strategy how to position the Maxtor brand in the future. While some expected that the brand may slowly disappear and Seagate could mainly take advantage focus of Maxtor's newly built production facilities, there is now more indication that the company will pursue a two-brand strategy to expand its already dominating market share in the global hard drive market.

According to Marc Jourlait, Seagate's vice president of segment marketing, Maxtor will become what manufacturers typically describe as "value" brand - products that are positioned to compete in entry-level markets and the lower-end of the mainstream segment. "Seagate-branded hard drives will continue to deliver leading-edge technologies, top capacities and performance, rich feature sets and best-in-class channel service and support, while our Maxtor drives feature mainstream capacities, features and performance to meet basic notebook and desktop needs," he said.

In a conversation with TG Daily, Jourlait outlined the strategy as "two different weapons" for the hard drive market that are "different enough" not to cause overlap in features and what customers are looking for. "There are two different value propositions that resonate with customers," he said. "We will use Maxtor to fight competitors in terms of price, rather than taking premium off the Seagate brand."

Maxtor has been one of the larger players in the hard drive market and Seagate hopes that a virtually non-existent overlap between former Maxtor and Seagate buyers will translate in a growing market share for the company. The fact that Maxtor will be aimed to defend Seagate from pricing pressures of other hard drive manufacturers such as Hitachi GST or Toshiba, raises questions whether Seagate will be able to transform the money-losing Maxtor unit into a profitable business. Jourlait however, believes that the elimination of organizational redundancies, growing production volumes and some trade-off in customer-service - such as a 3-year warranty for Maxtor instead of a 5-year warranty for Seagate drives - will allow the company to drive Maxtor into the black.

And while all new Maxtor drives will be based on Seagate's core hard drive technology, of course, there will be feature differences as well. Most importantly, the capacities of the Seagate Barracuda drives currently top out at 750 GB, while the Maxtor Diamond Max reaches only 320 GB. Maxtor now also has a 5400 rpm 2.5" notebook hard drive that is available with up to 80 GB capacity, while the Seagate Momentus device can be purchased with up to 160 GB and spin-speeds up to 7200 rpm.

Despite Maxtor's position in the high-volume, mainstream market, Jourlait does not think that Maxtor drives could take Seagate market share on the lower end or could even become the dominating brand of the two. "Seagate and Maxtor drives have had a very limited overlap so far and we believe that will continue to be the case. We had twice the share despite the premium price and are certain that we will not see a flip-flop in market shares."