Western Digital 2014 Annual Report Download - page 13

into the CE market increased 35% in fiscal 2014 from fiscal 2013. This increase was due in part to a refresh cycle by
the world’s two largest game console makers, who introduced new models in fiscal 2014, both of which feature HDDs
as standard equipment.
Competition
We compete with manufacturers of HDDs for client compute, client non-compute and enterprise applications
and manufacturers of SSDs. The HDD market consists of five principal brands: HGST, Samsung, Seagate, Toshiba and
WD. In solid-state products, we compete with a wide range of manufacturers, from small startup companies to
multinational corporations, including Intel Corporation, Micron Technology, Inc., Samsung Electronics Co. Ltd.,
SanDisk Corporation, Seagate Technology LLC and Toshiba Corporation.
The storage industry is increasingly utilizing tiered architectures with HDDs and SSDs to address an expanding
set of uses and applications. HDDs are highly substitutable due to industry standards that mandate the technical
form, fit and function of HDDs, and we believe there are no substantial barriers for existing HDD competitors to offer
competing products. HDD attributes include product quality and reliability, storage capacity, unit price, product
performance, production volume capabilities, delivery capability, leadership in time-to-market, time-to-volume and
time-to-quality, service and support and ease of doing business. The relative importance of these factors varies by
customer, market and use, and we believe that we are generally competitive in all of these factors. Semiconductor
media or solid-state technology provides high performance attributes in some enterprise-class applications and client
notebook designs and attractive functionality in consumer handheld applications requiring smaller form factors, lower
power and less storage capacity, such as smart phones and tablets. With advances in our own solid-state enterprise
business, coupled with our actions to strengthen those resources through acquisitions and investments, we believe we
are positioned to compete successfully in the enterprise-class solid-state segment of this market. Advances in mag-
netic, optical or other data storage technologies could also result in competitive products for storing digital content
with better performance or lower cost per unit of capacity than our products. We monitor the advantages, dis-
advantages and advances of the full array of storage technologies on an ongoing basis.
Business Strategy
Our business strategy is to be an industry-leading developer, manufacturer and provider of innovative storage
solutions that enable people to create, manage, experience and preserve digital content. We strive to achieve our busi-
ness strategy through the following elements:
‰relentless focus on operational excellence in all aspects of our business;
‰providing a full portfolio of compelling, high quality storage products with effective technology deployment,
high efficiency, flexibility and speed;
‰developing collaborative engineering relationships with customers that create value by solving their data
management needs through innovative solutions; and
‰strategically aligning our investments in profitable and growing markets such as mobility, solid-state and
cloud computing.
We believe our strategy provides the following benefits, which distinguish us in the dynamic and competitive
storage industry:
‰enables continued diversification of our storage product portfolio and entry into additional growing adjacent
markets;
‰allows us to achieve consistent financial performance, including strong returns on invested capital and cash
generation, thereby enabling efficient allocation of capital to shareholders and strategic investments in
innovation; and
‰creates compelling value for our customers and makes them more successful, while providing growth oppor-
tunities for our suppliers, employees, and shareholders.
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