Western Digital 2009 Annual Report Download - page 10

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PART I
Item 1. Business
General
We design, develop, manufacture and sell hard drives. A hard drive is a device that uses one or more rotating
magnetic disks (“magnetic media”) to store and allow fast access to data. Hard drives are key components of computers,
including desktop and notebook computers (“PCs”), data storage subsystems and many consumer electronic (“CE”)
devices.
We sell our products worldwide to original equipment manufacturers (“OEMs”) and original design manufacturers
(“ODMs”) for use in computer systems, subsystems or CE devices, and to distributors, resellers and retailers. Our hard
drives are used in desktop computers, notebook computers, and enterprise applications such as servers, workstations,
network attached storage, storage area networks and video surveillance equipment. Additionally, our hard drives are used
in CE applications such as digital video recorders (“DVRs”), and satellite and cable set-top boxes (“STBs”). We also sell
our hard drives as stand-alone storage products and integrate them into finished enclosures, embedding application
software and offering the products as WD»-branded external storage appliances for personal data backup and portable or
expanded storage of digital music, photographs, video and other digital data.
Hard drives provide non-volatile data storage, which means that the data remains present when power is no longer
applied to the device. Our hard drives currently include 3.5-inch and 2.5-inch form factor drives, having capacities
ranging from 40 gigabytes (“GB”) to 2 terabytes (“TB”), nominal rotation speeds up to 10,000 revolutions per minute
(“RPM”), and offer interfaces including both Enhanced Integrated Drive Electronics (“EIDE”) and Serial Advanced
Technology Attachment (“SATA”). We also embed our hard drives into WD»-branded external storage appliances using
interfaces such as USB 2.0, external SATA, FireWire
TM
and Ethernet network connections with capacities of 160 GB up to
8 TB. In addition, we offer a family of hard drives specifically designed to consume substantially less power than standard
drives, utilizing our WD GreenPower Technology
TM
.
In the second quarter of 2009, we began to design, develop, manufacture and sell media players. A media player is a
device that connects to a user’s television or home theater system and plays digital movies, music and photos from any of
our WD»-branded external hard drives or other USB mass storage devices. We sell our media players worldwide to
resellers and retailers under our WD»brand.
In the third quarter of 2009, with the acquisition of SiliconSystems, Inc. (“SiliconSystems”), we began to design,
develop, manufacture and sell solid-state drives. A solid-state drive is a storage device that uses semiconductor, non-
volatile media, rather than magnetic disks and magnetic heads, to store and allow fast access to data. We sell our solid-
state drives worldwide to OEMs and distributors for use in the embedded systems market which includes network-
communications, industrial, embedded-computing, medical, military, aerospace, media-appliance and data-streaming
applications.
Business Strategy
Our business strategy is to provide a broad selection of reliable, high quality hard drives at a low total cost of
ownership and with high efficiency and speed. We believe this strategy helps accomplish the following:
• distinguishes us in the dynamic and competitive hard drive industry;
• provides great value to our customers;
• allows us to better achieve consistent financial performance, including strong returns on invested capital; and
• provides continued diversification of our hard drive product set and entry into additional markets such as solid-
state drives and media players.
We have designed our business strategy to accommodate significant unit and revenue growth with relatively small
increases in operating expenses and to consistently achieve high asset utilization.
4