Western Digital, Brocade Face Challenges Despite Rebound: Report

From eWeek: While tablet computers such as the Apple iPad and Samsung Galaxy Tab threaten to eat into traditional computer company revenues, the data storages devices industry seems well insulated from this, according to a study from IT research firm The Bedford Report. The report found low cost data storage options do not seem to be affected by higher end products, and with the increase in popularity of new technology that supports media rich content, customers are again looking to supplement their technology arsenals with data storage devices.

The Bedford Report examines the outlook for companies in the data storage devices industry and provides research reports on Brocade Communications Systems, Inc. and Western Digital Corp. This year a large majority of major data storage companies have been reporting dramatic increases in demand for their products, according to Bedford research. According to Standard & Poor's, key drivers in the industry's rebound have been content digitization of old media such as paper and film, longer record retention for compliance with government regulations as well as the increasing popularity of social networks.

Western Digital Corp. specializes in the design, development, manufacture and sale of memory devices, most notably hard disk drives (HDDs), for the PC, server, and consumer device markets. The company’s drives are used in desktop and notebook PCs, enterprise storage, workstations, video surveillance equipment, networking products, DVRs, set-top boxes and other applications. “Going forward we argue that upside is expected to be limited in the personal computer segment,” the report noted. “WDC has claimed that competitive production decisions and pricing strategies will pressure margins going forward.”

Brocade Communications Systems Inc. supplies end-to-end Internet protocol based Ethernet and storage area networking solutions for enterprises and service providers. Its data storage segment offers infrastructure products and solutions, including directors, switches, routers, fabric-based software applications, distance/extension products, management applications, and utilities to centralize data management; and host bus adapters, converged network adapters, mezzanine cards, and storage area network switch modules for bladed servers.

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