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Cloud shift and desktop drops hurting HDD players

The latest market update from Seagate reveals tough market conditions in the hard disk drive world

The storage world continues to change as a result of the cloud and the move away from some of the traditional forms of hardware.

An indication of just what that means for those selling disk drives and relying on some of the traditional customers of HDD like desktops can be seen in the latest market update from Seagate.

The firm has warned that its previous forecasts for its third fiscal quarter, which ended 1 April, might be slightly off as a result of weakness in the market.

Seagate now to report revenues of around $2.6bn for the fiscal third quarter with HDD unit shipments of approximately 39m. Those numbers compare to the previous forecast of $2.7bn in revenues.

The firm saw reduced demand for traditional mission critical HDD enterprise products along with a drop in the amount of desktop client products being ordered in China.

The firm’s decision to scale back its participation in the low capacity notebook marker will have also played a role.

“We are disappointed that we did not anticipate the weaker demand in the March quarter. There are many complex issues impacting the traditional go to market channels in our market, which are reducing our forecast visibility,” said Steve Luczo, chairman and CEO of Seagate.

“Despite the disruption of the shifts in our traditional mission critical HDD business in the near term, we believe the long term benefit of cloud architectures for end users, and the related need for very high capacity drives, is a net positive for Seagate and the HDD industry,” he added.

The immediate knock on of the announcement was that the gaze of investors fell on Western Digital, which saw its share price drop.

Seagate’s rival will report its latest quarterly results on 28 April but it has already taken steps to reduce its reliance on the HDD market with its SanDisk acquisition and move into the NAND flash space.

The traditional HDD players have been hit over the last few years as a result of the problems that have been experienced in the PC market, where demand has continued to drop.​

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