Seagate increases lead in harddrive market

El Segundo (CA) - In a quarter with unusually high demand for storage products, Seagate was able to capitalize on the trend and expanded its lead over the competition, iSuppli reports. The Scotts Valley, Calif., based company now builds almost one in every three harddrives sold around the globe.

Typically, the second quarter is a weak season during the year and many firms in the IT industry are trying to keep sales stable from the preceding period. An overall slight growth to 89.7 million drives sold, compared to 87.3 million devices in Q1, reflects this seasonal characteristic. ISuppli analysts originally even expected to see a decline in sales for the second quarter.

Seagate, already the world's leading drive manufacturer, however, was able to take advantage of an apparent higher than expected demand for storage products in computers and consumer electronics and was able to increase its market share from 28.6 to 30.5 percent market share. Key to the firm's success was to overcome a shortage of HDD media, the portion of the disk upon which data is actually written to and read from.

Other benefactors of the strong demand Western Digital in position 2 of the ranking and a 17.6 percent market share (+0.1 points), Hitachi GST (+0.1 points), Toshiba (+0.2 points), Samsung (+0.3 points) and Fujitsu (+0.2 points). Maxtor's market share, now in position 4, dropped sharply from 16.3 to 13.5 percent.

According to iSuppli, Maxtor's decline in market share was due to changes in its outsourcing strategy and its expansion in offshoring in the second quarter. The company moved its production of desktop HDD assemblies to China from Singapore. Maxtor also is transferring some of its disk production to Asia from the United States. The strategy resulted in less market share, but the company reported a surprising profit of $10 million for the second quarter.

The result in detail: