Maxtor deal signals consolidation
HARD drives have long been unsung workhorses of
the digital world — best when they're quiet, fast and flawless.
Competition among their suppliers, meantime, has been fierce.
HARD drives have long been unsung workhorses of the digital world — best when they're quiet, fast and flawless. Competition among their suppliers, meantime, has been fierce.
Seagate Technology's pending US$1.9 billion acquisition of rival Maxtor Corp, announced on Wednesday, will likely make the industry even more cutthroat.
Scotts Valley-based Seagate, the world's largest disk-drive maker, hopes the move will strengthen its position in an arena where the players are fighting not only each other but also with a competing storage medium — flash memory, the hidden but powerful element in portable gadgets like the iPod nano.
------------
Bill Watkins, Seagate's chief executive, called the acquisition "a leverage deal."
"I'm buying $4 billion in revenue, and I'm going to leverage that in my manufacturing and engineering," Watkins said in a phone interview. Watkins noted how Samsung, Toshiba, and Hitachi, which have other profitable business divisions, can aim to expand their market share while operating their hard-drive units at a loss.
It's a dog-eat-dog world out there.
Posted: Thu - December 22, 2005 at 03:45 PM