Hard disk drive (HDD) manufacturer
Western Digital Corp.
(
WDC
) appears to have returned to growth. Having completed the
long-awaited acquisition of
Hitachi Ltd.
's (
HIT
) storage business last month, the drive maker has now introduced
the latest version of its HDD offerings.
Last week, Western Digital announced the shipment of a new 7mm,
2.5 inch mobile hard drive, Scorpio Blue. The new model is expected
to woo Notebook and Ultrabook users with its single-platter,
shock-proof, soundless, energy-saving, data-protective and
longer-lifetime features. The new device will also remain
compatible with all mobile computing systems.
Western Digital's Scorpio Blue will be available in 500GB and
350GB capacities, at $99.99 and $79.99, respectively, and will
carry a two-year warranty. Though the company is quite positive
about product adoption, we fear that it may have to fight over
price or market share with the existing players. This is because
7mm drives from archrivals
Seagate Technology plc
(
STX
) and Hitachi offering similar features have already created their
own markets.
Apart from this, Western Digital introduced a portable HDD, My
Passport Studio, targeting
Apple Inc's
(
AAPL
) MacBook users. The HDD will be available in 2 terabyte capacity
(1 terabyte = 1000 gigabyte) at $299.99. Also, a 4 terabyte
enterprise-class HDD was introduced by the company's newly acquired
storage unit (Hitachi Global Storage Technology).
During its second quarter, management stated that the company
would recover from the adverse effect of the Thailand flood and
return to normal operations in a quarter or two. We believe that
Western Digital's recent product offerings will help it in this
endeavor.
As per a recent forecast by U.S. market research firm IDC, HDD
revenues would grow at a 5-year CAGR (2011-2016) of 8.6%. We think
that leveraging Hitachi Global's technology and business exposure,
the company could capitalize on the opportunity.
Currently, Western Digital has a Zacks #1 Rank, implying a
short-term Strong Buy rating.
APPLE INC (
AAPL
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HITACHI (
HIT
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SEAGATE TECH (
STX
): Free Stock Analysis Report
WESTERN DIGITAL (
WDC
): Free Stock Analysis Report
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