Keeping market forces at bay can be a drag, as the folks at Seagate have found out. Like other hard disk drive (HDD) manufacturers, Seagate continues to fight commoditization of its drives for desktops and servers, much due to excess capacity and falling prices.
However, its foray into the booming notebook and consumer electronics markets a couple of years ago met with some success. Besides making 2.5-inch HDDs for notebooks, it started manufacturing HDDs for MP3 players, notably for the phenomenally-successful Apple iPods. In early 2005, Seagate also launched a 5-gigabyte personal pocket drive.
Over the years, Seagate has made known its desire to broaden its product line beyond hardware, and in September, the company purchased PC data backup software vendor Mirra Software.
But market dynamics threaten Seagate's fortunes yet again. This time, it's an external threat in the form of a flash-memory chip.
Apple has said it is killing off its iPod Mini line, which uses 1-inch HDDs from Seagate and other suppliers, in favor of the flash-memory iPod Nano product.
The biggest-capacity iPod Nano comes in 4GB, and Samsung, one of the world's biggest producers of flash memory chips in October, launched a 16GB model.
Seagate will certainly be a part of this growing battle for middle ground in the storage market, notably the portable electronics space.
According to a recent report from iSuppli, Seagate is currently the worldwide market leader in hard drives. The company shipped 30.5 percent of all hard drives worldwide during the second quarter of 2005.