What do the fellow Pros out there think of the big harddrive makers (Western Digital (WDC), and Seagate (STX))?I think everyone would agree that we're not going to stop storing massive amounts of data anytime soon, and it seems like these companies are priced for little to no growth (they also have nice dividends too). I understand that there may be concerns about these companies not getting a foothold in solid-state drives--and even if they don't become a big SSD player--in the next 3 year timeframe or so I believe that spinning drives will still have a significant market share--just due to the fact that you can get way more storage for the price as compared to an SSD.What do you guys think?
I agree that demand for hard drives will continue. The question is how long before solid-state storage can compete on price. Solid state keeps getting denser and cheaper, but the capacity of hard drives keeps going up at the same time. Or at least it has so far. In any case I expect* hard drives to remain the dominant storage device for at least the next decade, barring a breakthrough on the solid-state side.In the meanwhile, with only two manufacturers the question is how they will compete. If each one is satisfied to allow the other to keep its share of the market they can leave prices kind of high; that means high margins and high profits. However it either one decides to compete on price the other will have to counter, which means margins and profits go out the window. So far they are acting smart and not pushing on price.*An opinion worth no more than you paid for it.
The question is how long before solid-state storage can compete on price. -- RHAnother poster has another intriguing argument: The demand for storage is rising so rapidly that it would require a mammoth expansion in global chip capacity dedicated just to solid state storage.... and it still wouldn't keep up. Couple that with the idea that solid state drives are a low margin business..... and what reason is there for a low margin business to attract that huge investment?Yes, solid state should continue to gain ground in mobile devices, but that's definitely not the biggest part of the market. Server farms and other stationary applications should continue to utilize those spinning discs.If the above is reasonable, then it is also reasonable that the hard drive market has lots of life left in it, even growth. That would suggest that STX is undervalued..... significantly.Roblong STX
Those are some good points.Rob, how do you feel about Western Digital (WDC)? It looks like they're trying to buy into SSDs too, and they also have their hybrid drives. While not as cheap as STX, they seem pretty cheap too.http://gigaom.com/2013/06/24/hard-drive-maker-western-digita...
Western Digital is a similar story in terms of industry dynamics. I haven't done a deep comparison of the two recently, but I chose STX some time ago because I like the fact that they're buying back shares. I don't know if Western Digital is doing that.Rob
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