Western Digital 2009 Annual Report Download - page 12

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Mobile PC Market
The mobile PC market consists primarily of notebook and netbook computers. Individuals use mobile computers
both in and away from homes and businesses. Like desktop computers, mobile computers use software applications for
various needs and hard drives store notebook operating system and application software, and the data used by the
applications.
We believe that the demand for hard drives in the mobile PC market has grown in part due to:
• the overall growth of mobile sales, including increased transition from desktop computers to mobile computers;
• the increased mobility of the workforce;
• the increasing needs of businesses and individuals for increased storage capacity on their notebook computers;
• the continuing development of software applications to manage multimedia content; and
• the increasing use of broadband Internet, including content downloaded from the Internet onto notebook hard
drives.
We expect the mobile PC market to continue to grow faster than the desktop or enterprise markets in the next three
years. As the mobile PC market continues to evolve to a higher volume market, we believe customers are placing
increased emphasis on attributes such as quality, availability, reliability, execution, flexibility, capacity, performance,
power and the competitive cost structures of their hard drive suppliers. These are the same attributes that have been
emphasized for many years by customers in the high-volume desktop PC market.
Enterprise Market
The enterprise market for hard drives includes workstations, servers, network attached storage, storage area
networks, other computing systems or subsystems, and video surveillance. Historically, hard drives for this market have
utilized several interfaces, including the Small Computer Systems Interface (“SCSI”) and Fibre Channel Arbitrated Loop
(“FC-AL”). Beginning in 2003, these traditional enterprise interfaces have been supplemented or replaced in certain
storage applications by hard drives featuring the Serial Attached SCSI (“SAS”) interface technology, which is supported
by industry standards, as well as by SATA. SATA hard drives typically cost customers less than SCSI hard drives while
offering higher capacities and maintaining similar reliability, scalability and performance.
We believe that enterprise uses of SATA hard drives will continue to increase. During the past few years, a new disk-
based back-up application has emerged with high-capacity SATA hard drives augmenting SCSI and SAS hard drives, tape
and optical media. This new application, popularly referred to as “near-line” storage, has created a growth market because
hard drives back up or access data more quickly than tape or optical solutions, and quickly retrieve critical back-up or
near-line data. The availability of SATA hard drive solutions, which are more cost effective than SCSI and SAS hard drives,
promotes the increasing use of high-capacity hard drives in near-line storage applications. The low price per capacity of
SATA drives has stimulated new applications such as video surveillance, video editing/broadcasting and medical
imaging. These applications represent segments of a growing market for high capacity storage in non-computing
imaging and multimedia professions.
Enterprise-class SATA drives are becoming commonplace for IT infrastructure applications such as databases,
scientific computing, web content, web caching, web search engines and electronic mail. These applications have become
an important market for high-capacity SATA hard drives. We believe that this market will consume a growing portion of
the highest capacity hard drives in the next three years.
SAS is the next generation SCSI technology and has been replacing SCSI drives over the past few years. SATA
technology is compatible with SAS technology, enabling customers the flexibility of incorporating SATA hard drives in
SAS storage systems. We believe the market transition from SCSI to SAS has added to the growth of the enterprise-
class SATA market, which currently is estimated to be approximately 47% of the enterprise hard drive market.
High-performance server applications, including blade servers, are increasingly using 2.5-inch form factor hard
drives, supplanting traditional 3.5-inch drives. Smaller form factors enable more drives per physical space for increased
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