Western Digital 1998 Annual Report Download - page 4

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In fact, in the final quarter of the
1998 fiscal year, Western Digital’s unit
volume and market share with the
leading desktop PC makers increased,
quarter-over-quarter. Almost from the
first day, our yields on MR products
have been the highest in the history of
the Company.
The year’s most significant develop-
ment was the completion of a broad-
based hard drive component supply
and technology licensing agreement
with IBM Corporation. IBM will
supply Western Digital with its lead-
ing technology components and
designs for our production of desktop
hard drives. The drives we produce
under this agreement should greatly
improve WD’s competitiveness in
terms of time-to-market, time-to-
capacity and cost. We expect to begin
production of WD hard drives incor-
porating IBM’s advanced technologies
in the first half of calendar 1999.
This strategic relationship enables
Western Digital to leverage our high-
volume manufacturing and design
efficiency, our customer relationships
and our marketing know-how in the
challenging desktop hard drive
business.
Throughout fiscal 1998, Western
Digital’s Enterprise Storage Group
continued to grow as it supplied the
vigorous market for hard drives used
in workstations, servers and other
networking applications. In its first
18 months of volume shipments,
Western Digital’s high-end product
line captured an eight percent share
of this market.
Research and development continues
at a rapid pace along with the IBM-
based product developments. During
the year, Western Digital’s Personal
Storage Division introduced two
generations of desktop drives
incorporating MR head technology.
Our Enterprise Storage Group
delivered one of the industry’s first
low-profile (LP), MR-based 9.1 GB
Ultra SCSI drives.
Fiscal year 1999 dawned with Western
Digital’s strongest new product
roadmaps in place for both the desk-
top and enterprise markets. With a
50 percent year-to-year increase in
enterprise storage product research
and development spending, we plan
to bring a full enterprise storage
product line that features 18 GB/LP,
half-height, 10,000 RPM and fibre
channel offerings to the market over
the next 18 months. In the high-
volume desktop market, improving
time-to-market on 3.4 GB per platter
products and the next-generation
4.3 GB per platter platform, coupled
with WD hard drives featuring IBM
technology, will fortify our product
roadmap and position our Personal