Seagate fscks up: Disk drive sales fall short by $500m
Quality slip and flood-proof competitors fingered
Seagate will miss its fourth quarter's sales target as its competitors recover faster than expected from floods that knackered hard drive supplies.
The storage biz also had a quality-control issue with an enterprise disk product, which reduced shipments by 1.5 million units to 66 million, and increased costs. It issued a preliminary set of quarterly results to prepare Wall Street for the shortfall, adding that it expects to report $4.5bn (£2.9bn) revenues instead of $5bn (£3.2bn) and a 1 per cent fall in its gross margin to 33.6 per cent.
Stifel Nicolaus analyst Aaron Rakers thinks rival Western Digital may have gained market share compared to Seagate in its final fiscal quarter of 2012.
In its previous quarter Seagate made a $1.1bn profit on revenues of $4.4bn so it should make a healthy enough profit on sales of $4.5bn; let's say, half a billion dollars. It sees no market growth in the next quarter due to weakening economic conditions. ®
COMMENTS
Seagate Schmeegate
I'd be happy with drives that don't fuckup with bad sectors, and "odd deaths" from poor quality.
I'd like to see them come with rock solid reliability with a guaranteed minimum 24 / 7 - 3 to 5 year year life span.
Ohhhh 2 months use.. bad sectors and failing.... Hmmmm another one?
Good - arseholes.
Re: Idiot managers should cut prices and release huge disks now!
@Joerg
What a complete load of rubbish.
Screw customers......
...they screw you back.
Oh and SSDs are just so hot right now.
Re: Still A Tasty Profit Margin
Intel? Are you kidding? They aren't just the poster-boy for cartels. They're the poster-boy for monpolies.
Software has a marginal production cost of ZERO. So that's a bad example too.
Having a virtual monopoly is what's held back higher capacity drives
Why bother releasing higher capacity drives when you have virtually no competition and you can see all of your existing drives at such a high margin?
Wait till your competitors recover then start releasing the new drives, it's standard business practice.
