September 5, 2007 9:00 PM PDT
Seagate's new line of hard drives
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The Scotts Valley, Calif.-based company announced nine new products on the eve of its annual analyst meeting, scheduled to take place later this week.
Unlike in the past, when hard-drive makers typically released the same basic drive for various markets, they now nip and tuck their products to fit specific customer profiles and applications. Ideally, this lets drive makers squeak more profit out of their products and gain relief from the punishing price wars in the PC market.
"We spent too much time being boxed in by Intel and Microsoft," said Bill Watkins, Seagate's CEO.
Many of the new products are geared toward consumers because that market now consumes more gigabytes per year than the commercial market does. (Some of the new products will come out now, but others will appear over the next few months.)
"Three years ago, we did zero in backup drives," Watkins said. "This year, we will do $1 billion in backup drives at retail."
Seagate's DAVE (digital audio video experience) platform, for instance, is geared toward people who want to use their phone as an MP3 player, movie player or video recorder.
The unit, which contains a 60GB 1.8-inch drive, can connect to a phone via Wi-Fi, Bluetooth or a USB cable, and it can fit inside a coat pocket. Most phones come with a few gigabytes of capacity, at best, so a DAVE would significantly increase the amount of remote storage.
"It will stream video to a phone," Watkins said. "We hope the Apple iPhone becomes a big deal because the phone guys can't put in a lot of capacity. The carriers don't want to subsidize that."
Some companies are also testing out the DAVE as a vehicle for renting movies. In this scenario, customers would walk up to a kiosk and select the movies they wanted. The kiosk would then beam them into the DAVE unit. The movies would contain copyright protection to prevent piracy, Watkins added.
In a twist, Seagate doesn't plan to market the DAVE as a product under its own name. Instead, it will make the DAVE for cellular companies and let them brand it. Seagate is working out deals now.
At the other end of the Seagate spectrum is a drive optimized for security cameras. The drive, which offers up to 1 terabyte of storage, contains firmware that enables it to accept video streams from several sources.
Besides police agencies, some of the early customers will be gambling casinos, which are already big drive customers. Casino operators say individuals often try to stage accidents on their property and sue for medical damages. The drives effectively make it easier to capture high-resolution video and play back the "accident" during settlement discussions.
A terabyte drive can capture 32 days' worth of data, Watkins noted.
The product launch also included a 1-terabyte desktop drive, a 250GB notebook drive, and backup drives from the Maxtor line. Seagate acquired Maxtor last year and continues to use the brand for its "value" (i.e. cheaper and less fancy) line of products.
The desktop Maxtor backup drives sport up to 750GB of storage space and cost about $270 each. In 2004, Sony showed off a 1-terabyte home server in Japan that cost about $5,000, so the price of storage continues to plummet.
Seagate also announced new drives for the first quarter of 2008, with enhanced error correction for digital-video recorders, including a 1TB model. In Japan, consumers are already asking for 2TB drives for their DVRs.
"Everyone is looking at how much capacity they can put in," Watkins said.
Seagate has also said it plans to move into the market for flash-based hard drives. The company now sells only hard drives that store data on magnetic platters.
Samsung Electronics and SanDisk have already released flash drives for notebooks and blade servers. By coming out with its own flash drives, Seagate can participate in what Watkins claims will be a corner of the storage market.
Flash memory is more reliable and consumes less energy, but it costs more, in terms of cents per gigabyte.
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