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Seagate amazed by its own regulatory compliance

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Seagate was pleasantly surprised at how easily its $1.9bn swallowing of Maxtor last year passed regulatory muster.

The deal got the final thumbs up from shareholders in May after US and EU scrutineers greenlighted the deal in double-quick time. Seagate now controls more than 60 per cent of the enterprise HDD market.

Bosses didn't think they would get the go ahead until at least September this year, and had predicted that the union would only be fully consummated "early calendar 2007". The dual-branded giant now expects to be fully integrated by December, months ahead of schedule.

Seagate EMEA sales and business development director Kevin O'Dwyer told The Register monopolies watchdogs had let it through "surprisingly smooth and quick".

The EU explained its decision in a statement dated April 27:

On the supply side, there are eight other HDD manufacturers who compete against Seagate and Maxtor in the overall HDD business, of which three are in the enterprise HDD market. Manufacturers who are active in the production of HDDs for other applications face relatively low barriers to entry into the neighbouring HDD markets. Moreover, existing capacities in the different HDD markets can be extended without major cost and delay.

Seagate said it would use its even bigger pie slice to stabilise supplies to its customers for better retention, rather than flood the market to squeeze weaker competitors. The Maxtor brand will be maintained for retail external HDDs, where Seagate recognises its pull with punters. Although it has laid off 6,000 Maxtor staff, manufacturing capacity will increase.

The comments came at its annual marketing blitz, where it showcased a raft of products it has been trailing for some time. Seagate's sales types will push consumer storage and notebook drives as their strongest prospect for revenue growth in light of relatively stagnant forecasts in desktop and enterprise sectors. By adding an 1.8 inch iPod-friendly 60GB, 5mm form factor HDD to its range, Seagate reckons it now has the magnetic platters for every occasion.

The most notable enterprise offering was the Barracuda ES SATA drive, which bucks the trend towards faster spindles by slowing things back down to 7,200rpm. Seagate's wheeze is to punt reliability and capacity – 750GB – over performance.®

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