Western Digital 2005 Annual Report Download - page 23

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Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially
from those expressed in the forward-looking statements. Readers are urged to carefully review the disclosures made by the
Company concerning risks and other factors that may affect the Company's business and operating results, including
those made in this report under the caption ""Risk Factors That May Affect Future Results'' as well as the Company's
other reports filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company undertakes no obligation to publish revised forward-looking
statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Unless otherwise indicated, references herein to specific years and quarters are to the Company's fiscal years and
fiscal quarters.
The Company
Western Digital Corporation designs, develops, manufactures and sells hard disk drives. A hard disk drive is a
device that stores data on one or more rotating magnetic disks to allow fast access to data. Hard disk drives are one of the
key components found in most computers and data storage subsystems.
The Company's hard disk drives are used in desktop personal computers (""PCs''), notebook computers, enterprise
applications such as servers, workstations, network attached storage and storage area networks, and in consumer
electronics (""CE'') products such as personal/digital video recorders (""DVRs'') and satellite and cable set-top boxes
(""STBs''). In addition, the Company's hard disk drives are used in external hard disk drive products that feature high
speed buses such as 1394/FireWire/iLink
TM
, Universal Serial Bus (""USB'') and Ethernet.
Hard disk drives provide non-volatile data storage, which means that the data is not lost when power is no longer
applied to the device. The Company's hard disk drive products currently include 3.5-inch and 2.5-inch form factor
drives. The 3.5-inch form factor drives have capacities ranging from 40 gigabytes (""GB'') to 400 GB, nominal rotation
speeds of 5400, 7200 and 10,000 revolutions per minute (""RPM''), and offer interfaces including Enhanced Integrated
Drive Electronics (""EIDE'') and Serial Advanced Technology Attachment (""SATA''). The 2.5-inch form factor drives
have capacities ranging from 40 GB to 80 GB, nominal rotation speed of 5400 RPMs, and offer the EIDE interface. In
addition, the Company has plans to enter the 1.0-inch hard disk drive market in the future. The Company anticipates
that 1.0 inch hard disk drive products could be used in a variety of handheld consumer devices such as MP3 players,
cameras, and cell phones.
The Company sells its products worldwide to original equipment manufacturers (""OEMs'') for inclusion in
computer systems or subsystems, and to distributors, resellers and retailers. The Company's hard disk drive products are
currently manufactured in Malaysia and Thailand. For geographical financial data, see the Company's Consolidated
Financial Statements and Note 9 thereto included in this Annual Report on Form 10-K.
Market Overview
For calendar year 2004, the Company believes that the total market for hard disk drives was more than 300 million
units, or almost $24 billion. Over half of these unit shipments were to the desktop PC market. Thus, total hard disk
drive unit growth depends greatly on developments in the PC market. WD believes that the demand for hard disk drives
in the PC market will continue to grow in part due to:
‚ the overall growth of PC sales in established markets;
‚ the growth in emerging economies, such as India and China, driving the increased deployment of personal
computers;
‚ the increasing needs of businesses and individuals to store larger amounts of data on their PCs;
‚ the increasing sales of mobile computers that may have shorter replacement cycles and/or additional sales for
individuals to have both a desktop and a mobile computer;
‚ the continuing development of software applications to manage multimedia content; and
‚ the increasing use of broadband Internet, including downloading content from the Internet onto PC hard disk
drives.
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