Western Digital has announced a deal with direct vendor Gateway to ship its higher performance hard drives. Gateway yesterday started moving the WD Expert 7200 RPM hard drive with giant magnetoresisitve (GMR) heads and the Ultra ATA-66 interface in the Gateway Performance product line. This deal moves Western Digital into a more profitable area of the market. The market for these hard drives is expected to accelerate throughout the rest of 1999, according to market researcher IDC. GMR is a way of reading much a much higher density signal, so more information can be stored on each disk. The ATA-66 also speeds up the rate data can be transferred from disk to PC. Bob Peyton, analyst at IDC, said these Western Digital products were the latest technology available for desktops. He added it seemed Western Digital was adopting a change of strategy to compete in such a tough margin arena. "Western Digital is the most exposed company to price erosion in this area. It is trying to move up to greater performance products to get higher margins," he said. Peyton added that the lower end desktop drive industry was "not behaving rationally at the moment" and that margins were very tight in Western Digital's traditional market. He said this situation looked set to continue well into next year. The Irvine, California-based company said the total transition to GMR heads from standard anisotropic magnetoresisitve (AMR) heads was expected by the end of the year. ®