Tuesday, March 19

Is Samsung ejecting its hard drive business due to Apple?

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Samsung is supposedly looking to sell its hard drive business in wake of the emergence of Solid State Drives (SSD). Solid state drives can be seen as a high capacity flash drive of epic proportions. Apple has been flooding the market with solid state drives in their high end products. The new Macbook Air and both generation iPads are all using solid state drives in place of regular SATA hard drives. I suspect that this is the beginning of a trend. Organic growth is no longer happening in the traditional hard drive space and thus is forcing businesses to put up the for sale signs on certain departments. Stagnation is not a business ideal but new markets which are high growth is key for companies like Samsung, Apple, Western Digital and Seagate.

The Solid state drives are all about performance. The data is accessed at high speed which ensures a great user experience for the user.  Apple has ensured that all storage for high-end devices will be SSD as they normally are the leaders which everyone follows.

The hard drive space at the moment is a straight battle between Western Digital and Seagate. Western Digital acquired the Hitachi hard drive division in March for $4.3 Billion. If it meets approval it would provide Western Digital with a 50% share in the hard drive space. Seagate at the moment is standing at 30% and I expect them to open the chequebook and negotiations to buy Samsung’s hard drive division.

Update: Seagate have taken my advice and will pay $1.375 billion in a deal that gives Samsung a 9.6 percent stake in the hard drive specialist and that forges an alliance for the new era of flash memory storage.

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