Better Buy: Seagate Technology vs. Western Digital

Seagate Technology (NASDAQ: STX) and Western Digital (NASDAQ: WDC) hold a near-duopoly in platter-based hard disk drives (HDDs). Seagate controlled 43% of the HDD market last year, according to Coughlin Associates, while WD ranked second with a 36% share. However, Seagate and WD operate very different business models.

Over the past several years, WD expanded its flash memory (NAND) business with big acquisitions and investments to address the disruptive rise of flash-based solid-state drives (SSDs), which are faster, smaller, more power-efficient, and less prone to damage than traditional HDDs. As a result, WD now generates more than half its revenue from flash-based products.

Seagate didn't chase WD into the volatile and capital-intensive NAND market. Instead, it doubled down on HDDs with cheaper and higher-capacity drives. It reduced its exposure to the consumer market, which was more prone to disruption by pricier SSDs, and focused on selling cheaper HDDs to cost-conscious enterprise and data center customers.

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Source Fool.com