Western Digital Leads HDD Shipments for Fourth Consecutive

From X-bit Labs: Western Digital shipped more hard disk drives (HDDs) than its arch-rival Seagate Technologies in the fourth quarter of last year as well as in the whole 2010, financial results of both companies revealed this week. Still, Seagate continues to earn more thanks to its highly-competitive portfolio of enterprise-class and mobile hard drives.

WD shipped 52.2 million hard disk drives in the quarter that enter on December 31, 2010. Seagate supplied 48.9 million HDDs in the same timeframe. Average selling price (ASP) of a WD hard drive was approximately $47 per unit, down $5 year-over-year and up $1 sequentially. Seagate did not reveal its ASPs, but traditionally there are a little higher compared to Western Digital as the Scotts Valley, California-based company has a lot of lucrative products in its portfolio.

The two companies predicted that the total available market of hard drives will be in the range between 155 and 165 million in Q1 2011.

Throughout the whole calendar 2010 Western Digital consistently outsold Seagate on unit basis. During the conference call with financial analysts the latter said that despite of slowing demand it decided not to reduce prices in order to sell more units. Indirectly, the move shows that the company is not exactly comfortable with its cost-structure and may simply be unable to profitably fulfill certain orders to maintain its unit market share.

"Disk drive shipments had a greater-than-seasonal slowdown in the last two weeks of the quarter. In particular, Seagate experienced a slowing of demand in the Asia-Pacific distribution channel during the last two weeks of the quarter and elected to reduce shipments and maintain our pricing discipline," said Steve Luczo, chief executive and chairman of Seagate.

Seagate Technology's revenue for Q4 2010 (Q2 FY2010) on a GAAP basis were $2.7 billion, gross margin were 19.5%, net income was $150 million and diluted earnings per share of $0.31. On a non-GAAP basis, which excludes the net impact of purchased intangibles amortization and restructuring, Seagate reported net income of $159 million and diluted earnings per share of $0.33 for the quarter ended December 31, 2010.

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