Western Digital 2007 Annual Report Download - page 13

Download and view the complete annual report

Please find page 13 of the 2007 Western Digital annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

Since 1999, DVRs have been available for use in home entertainment systems and they offer enhanced capabilities
such as pausing live television, simplifying the process of recording, cataloging recorded television programs and quickly
forwarding or returning to any section of a recorded television program. Additionally, digital video disk (“DVD”)
recorders increasingly incorporate hard drives to allow for DVR functionality and faster recording of content onto
removable DVDs. The market for these products favors larger capacity hard drives and continues to grow in Japan,
North America, and Europe. Additionally, the rest of Asia Pacific shows strong interest in this market. We believe
growth in this market will continue to build demand for higher capacity hard drives.
The proliferation in the CE market of more sophisticated mobile devices including cell phones and MP3 players is
driving the delivery of diverse content from hard drive intensive hosts. We believe this is one of the factors influencing
increased sales of enterprise-class SATA drives. We also believe that multimedia handheld devices such video cameras and
high-resolution still cameras are enabling consumer production of expansive digital content that requires increasing
amounts of small form-factor hard drive storage.
Hard drives with 1.8-inch or 1.0-inch form factors primarily address the consumer handheld device and portable
external storage markets. The majority of hard drives used in portable media players that play both digital audio and
video content are 1.8-inch form factors. Currently, we believe the markets for these handheld devices are better served by
flash memory as opposed to rotating magnetic storage.
External Hard Drive Market
Most new PC systems include high-speed external interfaces, such as USB 2.0, external SATA, FireWire
TM
or
Ethernet network connections that permit users to supplement the storage space of their PC systems or home and small
office networks with the use of external hard drives. Users store additional programs or multimedia content, and back up
internal hard drives with external hard drives, as well as mobile external hard drives for mobility convenience. Although
external hard drives are a small part of the overall hard drive market, we believe that sales will continue to grow. External
storage can often be the easiest, quickest or only way of adding additional storage capacity to either a desktop or notebook
computer. We believe there is an increasing consumer awareness of the need and value of securely storing personal digital
content through backup applications and devices. In addition, there is opportunity for external storage as a way of
expanding storage capacity in CE devices such as DVRs.
Other Market Opportunities
We regularly review opportunities to apply our knowledge of data storage technology to markets that we do not
currently serve. Based on significant investments we made over the last four years, we believe we now have the technology
building blocks to increase our overall market penetration and be a full-line hard drive supplier. Consistent with our
measured and deliberate approach to new market entries in the recent past, our approach to additional new markets will
be based on a careful assessment of the risks, rewards, requirements and profit potential of such actions.
Products
We offer a broad line of hard drives designed for various markets. We market our hard drives under brand names
including WD Caviar», WD Raptor», WD Scorpio», WD Passport», My Book
TM
, My DVR Expander
TM
and Green-
Power
TM
. These hard drives service the desktop, mobile, enterprise, CE and branded products markets, and can be found
in products including desktop computers, notebook computers, enterprise storage, workstations, video surveillance
equipment, networking products, DVRs, STBs and external storage appliances.
Desktop Hard Drive Products
Our hard drives designed for the desktop market currently consist of 3.5-inch form factor products with capacities
ranging from 40 GB to 1 TB. These products utilize either the EIDE or SATA interfaces, providing high performance
while retaining ease of use and overall low cost of connection. The type of EIDE interface currently used in our hard drives
is ATA/100, which signifies a burst data transfer rate of 100 megabytes per second, which is the maximum specified data
transition that can be sustained under ideal conditions. The SATA interface available in many of our hard drives enable
burst transfer rates of up to 300 megabytes per second.
7