Western Digital Corp. (WDC) overtook Seagate Technology Inc.
(STX) as hard-disk-drives market leader by number of shipments in
the first quarter, according to market researcher iSuppli Corp.
Both companies increased their number of units shipped, but
overall industry hard-disk-drive shipments declined in the first
quarter from the previous one, falling 1% to 164 million units.
Although Western Digital's shipment numbers trumped Seagate's,
the latter remained on top by revenue because it serves the
high-end enterprise sector, which has better financial returns.
"In comparison, Western Digital employed a lower-cost business
model that translated into reduced average selling prices and less
revenue but higher unit shipments," Fang Zhang, analyst for storage
systems at iSuppli, said Tuesday.
Western Digital's share of total shipments rose to 31.3%
compared with Seagate's 30.9%. Western Digital shipped a record
51.1 million hard-disk drives in the quarter, up 3.2% sequentially,
while Seagate shipped 50.3 million, up 0.8%. But Seagate continued
to lead on revenue with $3.1 billion, compared to Western Digital's
$2.64 billion.
ISupply said that whether Western Digital can keep the No. 1
spot will depend on such factors as product competitiveness, new
offerings, success at retaining business while venturing into new
markets and its capability to control demand and supply.
In April, Seagate's strong hard-disk-drive shipments helped it
swing to a profit in the fiscal third quarter. A couple days later,
Western Digital reported its fiscal third-quarter profit surged
because of higher shipments as well as better margins, beating
expectations.
Western Digital shares closed Tuesday down 3.6% at $33.56, while
Seagate shares closed down 5.9% at $14.46. Shares in both companies
have risen more than the broader market in the last year.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com